The deal, first announced last summer, is worth around $500 million and has been undergoing regulatory procedures ever since
Back in 2018, Liberty Latin America (LLA), part of the multinational Liberty Global that notably owns Virgin Media in the UK, purchased an 80% stake in Cabletica, a fixed provider in Costa Rica, offering both TV channels and internet services. Cabletica quickly became one of LLA’s fastest growing businesses.
Meanwhile, at around the same time, Telefonica was announcing a major strategic shift that would see it pull back from its Latin American businesses (excluding Brazil), instead focussing on its home markets back in Europe.
Part of this divestment was the sale of Telefonica Costa Rica (Movistar), which was quickly arranged with Millicom International Cellular in February 2019 or around $ 570.7 million.
However, this deal ran into regulatory hurdles later that year and, in May 2020, Millicom terminated the Share Purchase Agreement.
But Telefonica did not have to wait long for a new suitor to appear for its Costa Rican unit. LLA, enjoying their success in the Costa Rican market with Cabletica, had soon signed a deal with the operator to acquire Movistar just two months later, for around $500 million.
Naturally, this deal too was subject to regulatory scrutiny, but today sees Costa Rica’s Superintendency of Telecommunications (Sutel) formally approve the takeover.
“The technical analysis determined that this concentration does not generate negative effects or affect healthy competition,” said Sutel in a statement.
Sutel will now send its analysis to the Ministry of Science, Technology and Telecommunications who will make the final decision to approve or reject the deal.
Once cleared, this deal will allow LLA to offer services across the telecoms spectrum, from mobile to fixed broadband and telephony services, as well as entertainment via subscription TV services.
For Telefonica, this sale will be added to their list of Latin American sales of late. It is already in the process of selling its Nicaraguan and Panamanian subsidiaries to Millicom, Guatemalan unit to America Movil, and Uruguayan unit to Argentine holding company Grupo Olmos. A deal to sell Movistar’s Salvadorian unit to America Movil fell through in December last year.
But LLA may not yet be finished when it comes to LatAm acquisition from Telefonica, with rumours circulating in December last year that they may, in fact, be eying up Movistar’s subsidiaries in Colombia and Ecuador.
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