Liberty Latin America to Combine Chilean Operations with America Móvil

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Liberty Latin America said Wednesday that it has agreed to combine its VTR mobile operations in Chile with America Móvil’s Claro Chile in a 50-50 joint venture.

According to Liberty Latin America, VTR has about 3 million mobile subscribers in Chile while Claro Chile has about 6.5 million customers. The combination, the companies said, will create a business with greater scale, a more diversified product line and a more flexible capital structure that will enable it to expand its fiber footprint and offer 5G service. By 2025, the JV said it expects its fixed network to pass 6 million homes with the majority having access to fiber-to-the-home infrastructure.

Liberty Latin America said the JV will have about $180 million in synergies, mostly related to network and operating efficiencies, 80% of which are expected to be achieved within three years of completing the deal. The transaction should be completed in the second half of 2022. 

This is the second deal Liberty Latin America has reached with America Móvil in the past two weeks. On Sept. 15, Liberty’s Cable & Wireless Panama subsidiary agreed to buy America Móvil's Panama operations — Claro Panama — for about $200 million. 

Liberty said that executive leadership for the JV will be agreed upon prior to the close of the transaction, with the board consisting of eight members, four from each of Liberty and American Móvil. The role of chairperson will rotate between the shareholders and certain actions of the JV will be subject to the consent of both parties.

Mike Farrell is senior content producer, finance for Multichannel News/B+C, covering finance, operations and M&A at cable operators and networks across the industry. He joined Multichannel News in September 1998 and has written about major deals and top players in the business ever since. He also writes the On The Money blog, offering deeper dives into a wide variety of topics including, retransmission consent, regional sports networks,and streaming video. In 2015 he won the Jesse H. Neal Award for Best Profile, an in-depth look at the Syfy Network’s Sharknado franchise and its impact on the industry.