Telefónica has finalized the sale of its Chilean subsidiary to a consortium of NJJ Holding and Millicom Spain for $1.2 billion, marking the end of a 35-year presence in the country and a continued strategic shift away from Latin American markets, the company confirmed Tuesday.
The deal, initially announced earlier this year, consists of an upfront payment of $50 million, with the potential for an additional $150 million contingent upon the achievement of certain value-creation milestones. Telefónica will also contribute further financial resources to ensure the stability of the Chilean operation during the transition, according to a company statement.
Alfonso Gómez, CEO of Telefónica Hispam, stated that the company is leaving behind a “robust operation, a modern infrastructure and a platform prepared for the new shareholder to continue promoting the country’s digital development on solid foundations.” The transaction is structured as an acquisition, not a merger, and Telefónica anticipates a seamless continuation of services under the new ownership.
Customers of Movistar, Telefónica’s brand in Chile, are not expected to experience immediate changes to their plans or contracts. Existing contracts, mobile plans, and home services – including fiber optic and television – will maintain their current terms and pricing, at least in the short to medium term. The brand itself is expected to continue operating as before.
The acquisition by NJJ Holding and Millicom represents a significant shift in the Chilean telecommunications landscape, introducing new international capital into the market. Latham & Watkins LLP advised Telefónica on the sale, according to a press release from the firm.
The sale is part of a broader trend of Telefónica streamlining its operations and focusing on core markets. The company has been actively divesting assets in Latin America as part of a global restructuring plan.
