May 16, 2021

Telefónica sells its subsidiaries in Guatemala and El Salvador to América Móvil | Economy

Telefónica sells its subsidiaries in Guatemala and El Salvador to América Móvil | Economy

Telephone has sold its subsidiaries in Guatemala and El Salvador to the Mexican América Móvil. According to the stock market regulator, it has reached an agreement with the company of businessman Carlos Slim so that Telefónica Centroamérica (of which Telefónica has 60% while the other 40% belongs to the investment group Corporación Multi Inversiones) sells Telefónica Móviles Guatemala and 99.3% of Telefónica Móviles El Salvador for 570 million euros in total. This means achieving net capital gains of 120 million. Thus, for its participation in both companies, the Spanish multinational will enter a total of 342 million, and will have capital gains of 72 million.

The operation, which had been brewing since last summer, will serve the Spanish multinational to reduce its bulky debt of 42,636 million euros, according to the figures of the end of last September.

The newly announced sale does not include the other three Central American subsidiaries of Telefonica (Costa Rica, Panama and Nicaragua) whose divestment may be closed in the coming weeks if there is an agreement with the local Caribbean group Millicom, which operates under the Tigo brand, although no the bid of the American giant AT & T is ruled out.

"This operation is part of the Telefónica Group's asset portfolio management policy, based on a strategy of value creation, optimization of return on capital and strategic positioning, and complements the objective of debt reduction and strengthening of balance through the organic route, in a scenario of increasing cash generation, which allows us to maintain sustainable and attractive shareholder remuneration, "the company said in its statement to the National Securities Market Commission.

América Móvil grows in Central America

América Móvil, meanwhile, has made a statement in which it has confirmed the transaction and recalled that the companies it buys provide mobile and fixed telecommunications services, including voice, data and pay television. "With this transaction, AMX consolidates its position as one of the leading providers of telecommunications services in Central America, strengthens its position in both countries to continue providing integrated telecommunications services and is positioned to provide new generation services, including 5G," designated the Mexican company.

Telefónica, in its press release, has warned that the closing of the sale of Telefónica Guatemala has taken place today, but that the sale of Telefónica El Salvador is subject to the relevant regulatory conditions.


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