Apollo and Claure in talks for $10bn Millicom takeover bid


Private equity firm Apollo Global Management, alongside, former SoftBank CEO Marcelo Claure, have reportedly entered into discussions with Latin American operator group Millicom International Cellular

This week, Millicom has confirmed that it is engaged in ongoing discussions with investment firm Apollo Global Management and Claure Group for the sale of all its outstanding shares.

Apollo and Claure are reportedly considering an offer of around $19 per share, a move that would value the business at just over $9 billion, including debt.

An official offer has yet to be made, with Millicom quick to point out that there is no certainty that any deal will materialise.

The potential takeover comes at a time when acquisitions of this scale are difficult finance, with major banks unwilling to offer large loans due to high interest rates and the turbulent nature of the global economy.

Millicom itself currently has a net debt of around $6.9 billion, with sources suggesting that Apollo and Claure are attempting to structure their takeover bid in such a way as to avoid needing to refinance these financial obligations.

For Millicom, the deal would come at a time of considerable consolidation. The operator has been refocussing its efforts on its Central and South American operations for some years now, as well as gradually withdrawing from its African markets.

In 2021, the company acquired full control of its Guatemalan joint venture for $2.2 billon, as well as finally selling off its final African business, Tigo Tanzania.

In February last year, Millicom formally announced a new three-year plan to invest over $3 billion in its Central and South American businesses, as well as potentially spinning off its mobile money business and mobile tower infrastructure unit.

Some months later, this strategic shift had enticed French billionaire and owner of Iliad Group Xavier Niel to take a 7% stake in the operator for an undisclosed sum.

The first steps of Millicom’s new investment plan are already beginning to be put into action, most notably building on its networks in Colombia and Paraguay. More recently, Millicom announced earlier this week that Tigo Panama will invest $100 million to modernise and expand its 4G and fibre networks later this year.

Apollo, meanwhile, has shown increasing appetite for telecoms infrastructure in recent years, most notably striking a deal with Lumen back in 2021 to acquire the company’s incumbent local exchange carrier business, including its consumer, small business, wholesale and mostly copper-served enterprise customers and assets in 20 states. The $7.5 billion transaction was closed last year, with the business subsequently renamed Brightspeed.

It currently serves around 6 million customers in the US with phone and broadband services.

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