Overview of the Transaction
Telefónica, a prominent telecommunications company, has announced the sale of its 100% stake in Movistar Uruguay to Millicom Spain for $440 million (approximately 389 million euros, based on current exchange rates). The transaction was disclosed to the Comisión Nacional del Mercado de Valores (CNMV) late on Wednesday.
“Today, Telefónica Hispanoamérica, a 100% subsidiary of Telefónica, has reached an agreement with Millicom Spain to sell all the shares it holds in Telefónica Móviles del Uruguay, representing 100% of its capital stock,” the company stated in a press release.
Regulatory Approvals and Previous Divestments
Unlike recent sales of Telefónica’s subsidiaries in Argentina and Peru, which were finalized simultaneously with the announcement, this Uruguayan operation is subject to obtaining necessary regulatory approvals.
This sale aligns with Telefónica’s asset management policy and strategy to reduce its exposure in Hispanoamérica. Recently, Telefónica divested its Argentine subsidiary to Telecom Argentina (controlled by the Clarín media group) for around 1.19 billion euros on February 24th. Additionally, in early April, Telefónica sold its Peruvian subsidiary to Argentine firm Integra Tecc International for approximately 900,000 euros.
The Peruvian subsidiary was in a restructuring process and had a debt of around 1.24 billion euros by the end of 2024. The Argentine sale had a €1.2 billion impact on Telefónica’s Q1 results, while the Peruvian transaction accounted for roughly €500 million. Combined, these two operations resulted in a €1.731 billion impact on Telefónica’s Q1 accounts, leading to a net loss of €1.304 billion.
Telefónica’s Broader Strategy
Beyond Argentina, Peru, and Uruguay, Telefónica has also sold its Colombian subsidiary to Millicom for approximately 368 million euros, though this transaction remains unclosed.
Telefónica’s President, Marc Murtra, discussed the company’s strategy to decrease its Hispanoamérica exposure during a forum organized by the Spanish newspaper ‘Expansión.’ Murtra emphasized that exiting Hispanoamérica strengthens Telefónica’s position to pursue consolidation operations in European telecom markets, including Spain, Germany, and the UK, as well as Brazil.
“When looking at the accounts and cash generation, we believe our capital is used more efficiently by focusing on other assets. We believe these moves, though not intuitive, still provide us with greater capacity to consolidate,” Murtra highlighted.
Millicom’s Perspective
Millicom, known primarily for its Tigo brand, stated that this acquisition enables growth in Southwest America while anticipating a positive impact on free cash flow for shareholders starting in 2026.
“Millicom expects this transaction to have a positive impact on EFCF (free cash flow for shareholders) starting from 2026, driven by operational efficiencies and regional integration. Upon closing the operation, we anticipate immediate benefits from scale, increased synergies, and sustained value creation in our Latin American platform,” Millicom added in a press release.
Millicom also pointed out Uruguay’s stable macroeconomic environment and described Telefónica’s Uruguayan subsidiary as a “profitable, consolidated business with nationwide coverage.” The company anticipates operational and commercial synergies with its existing operations in Paraguay and Bolivia.
“This acquisition marks a crucial milestone in our growth strategy in Latin America, particularly in Uruguay, a country with strong economic fundamentals and a digital agenda oriented towards the future. We commit to being a long-term partner in Uruguay’s digital development through infrastructure investments, service quality improvements, and fostering innovation and talent cultivation,” Millicom CEO Marcelo Benítez stated.
