After more than three decades in the country, Telefónica has confirmed the sale of its Chilean subsidiary to the NJJ Holding and Millicom Spain groups. The decision is part of the company’s global plan to gradually exit the Hispanic American market, according to a statement released Tuesday.
The transaction marks the end of a 35-year cycle in Chile and opens a new chapter under the control of international capital that, until now, had no direct presence in the local market. Telefónica CEO for Hispam, Alfonso Gómez, stated that the company is leaving behind “a robust operation, a modern infrastructure and a platform prepared for the new shareholder to continue driving the country’s digital development on solid foundations.”
The sale includes an initial payment of $50 million, with the potential for up to an additional $150 million contingent upon the achievement of value-generation goals. Telefónica will likewise contribute additional funds to ensure the financial stability of the subsidiary at the close of the deal, according to sources familiar with the transaction.
One of the primary concerns among users has been the future of services marketed under the Movistar brand. However, according to information available in the market, the brand will continue to operate normally, as the operation is an acquisition and not a merger with another company already operating in Chile. No significant modifications are anticipated in the short or medium term. Existing contracts, as well as mobile plans and home services – such as fiber optics and television – will maintain their current terms and values.
The deal, valued at $1.2 billion, was advised by Latham & Watkins, who represented Telefónica in the transaction, according to a press release. Millicom and NJJ Holding jointly secured the acquisition, as reported by Reuters and Data Center Dynamics.
The Chilean telecommunications market now has a new controlling stakeholder, although operational continuity for millions of customers is maintained, for now.