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LUXEMBOURG - Millicom International Cellular S.A., known as Millicom, has announced a definitive agreement to acquire Telefónica Móviles del Uruguay S.A. for an enterprise value of USD 440 million. The transaction, which is expected to close subject to customary approvals, will expand Millicom’s presence in South America.
The acquisition is set to be earnings before financing costs and cash taxes (EFCF) accretive starting in 2026, as the company anticipates operational efficiencies and synergies with its existing operations. With a healthy gross profit margin of 76% and strong free cash flow yield, InvestingPro analysis suggests Millicom is well-positioned for this expansion. Millicom’s CEO, Marcelo Benitez, highlighted the strategic move as a key milestone in the company’s growth strategy, reinforcing its commitment to Uruguay’s digital development.
Telefónica Uruguay, the second-largest mobile operator in the country, will add to Millicom’s portfolio, providing immediate scale benefits and diversifying its cash flow sources. Uruguay boasts the highest GDP per capita in Latin America, a stable currency, and an investment-grade credit rating of BBB+. The country’s telecommunications market is supported by a stable regulatory environment conducive to foreign investment. This expansion aligns with Millicom’s robust financial health, rated as "GREAT" by InvestingPro’s comprehensive analysis, with particularly strong scores in price momentum and growth potential.
The mobile market in Uruguay has been growing at an approximate rate of 4% annually since 2022, driven by rising postpaid adoption and the region’s highest average revenue per user (ARPU). Millicom anticipates significant synergies across network, operations, and commercial integration, enhancing its digital ecosystem and service offerings in the region.
The acquisition aligns with Telefónica’s regional repositioning and will temporarily increase Millicom’s leverage by approximately 0.1x. Millicom, which operates under the TIGO brand, provides a wide range of digital services and products across Latin America.
This move by Millicom is based on a press release statement and remains subject to regulatory approvals and customary closing conditions.
In other recent news, Millicom International Cellular S.A. reported first-quarter 2025 revenue of $1.37 billion, which fell short of the analyst consensus estimate of $1.44 billion. Despite the revenue miss, the company highlighted strong customer growth with the addition of 262,000 new postpaid mobile subscribers and 62,000 new home broadband customers. Adjusted EBITDA increased by 0.6% to $636 million, showing a 6.9% organic rise. Net income rose to $193 million, bolstered by approximately $95 million in one-time gains. The company reaffirmed its 2025 financial targets, including an equity free cash flow goal of $750 million and a year-end leverage below 2.5x. In other developments, Millicom’s Annual General Meeting saw the re-election of seven board members and the introduction of Pierre Alain Allemand as a new director. Shareholders approved a dividend distribution of USD 3 per share, to be paid in four installments starting in July 2025. Additionally, the company received approval for its Share Repurchase Plan and made amendments to its Articles of Association following its delisting from NASDAQ Stockholm.
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