América Móvil to buy Telefónica Guatemala, El Salvador for $648 million
Telefónica, through its majority owned subsidiary Telefónica Centroamérica Inversiones, S.L., has agreed to sell Telefónica Móviles Guatemala, S.A. and 99.3% of Telefónica Móviles El Salvador to América Móvil. Telefónica will receive $333 million for Telefónica Guatemala and $315 million for Telefónica El Salvador for a total of $648 million.
The sale of Telefónica Guatemala has closed, while the close of the Telefónica El Salvador deal is subject to applicable regulatory conditions. Telefónica did not estimate how long it would take to accommodate those conditions.
The $648 million return for the two business units is 9.7X the estimated 2018 EBITDA of the two companies combined. Telefónica expects to accrue capital gains before taxes and minorities of approximately 120 million euros, principally from Telefónica El Salvador. The international communications services provider says the deals are part of an asset portfolio management policy that focuses on value creation, improving return on capital, and strategic positioning. The sales also will reduce debit and strengthen its balance sheet in what Telefónica described as “a growing cash flow scenario.”
Telefónica Centroamérica Inversiones is 60% owned, directly and indirectly, by Telefónica and 40% by Corporación Multi Inversiones.
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Stephen Hardy | Editorial Director and Associate Publisher
Stephen Hardy has covered fiber optics for more than 15 years, and communications and technology for more than 30 years. He is responsible for establishing and executing Lightwave's editorial strategy across its digital magazine, website, newsletters, research and other information products. He has won multiple awards for his writing.
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