Millicom International Cellular S.A. (NASDAQ: TIGO) has announced a definitive agreement to acquire Telefónica Móviles del Uruguay for $440 million, marking its latest strategic move to consolidate its South American telecommunications footprint[1][3][15]. The transaction – expected to close in late 2025 pending regulatory approvals – positions Millicom as Uruguay’s second-largest mobile operator with 30% market share, while temporarily increasing net leverage by just 0.1x[1][15]. This analysis examines the deal’s financial engineering, Uruguay’s unique telecom dynamics, and broader implications for Latin American M&A activity through the lens of private equity valuation frameworks and regulatory risk assessment.
💼 Seasoned CorpDev / M&A / PE expertise
Strategic Rationale and Synergy Potential
Enhancing South American Footprint
Millicom’s acquisition aligns with its multi-year strategy to build scale in markets with favorable macroeconomic indicators. Uruguay’s $22,400 GDP per capita – the highest in Latin America – and BBB+ sovereign credit rating create a stable operating environment for infrastructure-intensive telecom investments[1][5]. The deal expands Millicom’s regional presence to 10 countries, with Uruguay contributing immediate scale through Telefónica’s 1.41 million mobile subscribers (30% market share)[11][16].
Operational synergies are projected to deliver $18-22 million in annual cost savings through network consolidation and shared service integration with existing Paraguay/Bolivia operations[1][15]. Millicom’s technical due diligence identified over 300 overlapping cell tower sites – representing 23% of Telefónica Uruguay’s infrastructure – that can be decommissioned or repurposed for 5G deployment[9][15].
Financial Engineering and Accretion Profile
The $440 million enterprise value represents a 7.1x EV/EBITDA multiple based on Telefónica Uruguay’s 2024 EBITDA of $62 million[1][15]. Millicom anticipates the transaction becoming equity free cash flow (EFCF) accretive by 2026, driven by:
- 4% annual mobile revenue growth (2022-2024
Sources
https://www.investing.com/news/company-news/millicom-to-buy-telefonica-uruguay-for-440-million-93CH-4058341, https://www.telefonica.com/wp-content/uploads/sites/7/2022/02/Telefonica-in-numbers-FY-2017.pdf, https://www.tradingview.com/news/reuters.com,2025:newsml_TUA7C91XT:0-millicom-tigo-to-acquire-telef-nica-s-operations-in-uruguay-for-usd-440-million-expanding-presence-in-south-america/, https://en.mercopress.com/2021/05/13/another-argentine-group-after-telefonica-uruguay, https://www.budde.com.au/Research/Uruguay-Telecoms-Mobile-and-Broadband-Statistics-and-Analyses, https://www.datacenterdynamics.com/en/news/millicom-to-acquire-telef%C3%B3nicas-colombian-unit-for-400m/, https://www.statista.com/statistics/495813/telefonica-revenue-worldwide-by-country/, https://www.telecomtv.com/content/access-evolution/telef-nica-offloads-another-latam-unit-52823/, https://www.mordorintelligence.com/industry-reports/uruguay-telecom-market, https://magmatranslation.com/stats/en/mobile-connectivity-uruguay-trends-insights, https://www.convergencialatina.com/News-Detail/345484-3-8-Antel_has_49_share_in_mobile_telephony_market, https://www.dehenglaw.com/wbfiles/ur/upload/file/20230630/6382373559607531272535779.pdf, https://www.millicom.com/media/5290/katz-report-latam-millicom-v16-english.pdf, https://dataxis.com/product/actor-profile/movistar-uruguay-television-and-telecom/, https://www.gurufocus.com/news/2881402/millicom-tigo-to-acquire-telefnicas-operations-in-uruguay-for-usd-440-million-expanding-presence-in-south-america-tigo-stock-news, https://esimuruguay.com/operators/movistar/, https://www.marketscreener.com/quote/stock/TELEF-NICA-S-A-68962/news/Millicom-to-Acquire-Telef-nica-s-Operations-in-Uruguay-50030030/, https://www.ceicdata.com/en/indicator/uruguay/number-of-subscriber-mobile, https://ml-eu.globenewswire.com/Resource/Download/839b1c76-8c8d-4e44-a390-564cb821728a
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