We reported recently that Telefonica had found an (at the time) unnamed new buyer for its mobile business in Costa Rica after the collapse of a deal with Millicom. Well, we now know the name of the buyer. It’s Liberty Latin America.
Liberty Latin America, a communications company with operations in Chile, Puerto Rico, the Caribbean and other parts of Latin America, has announced that it has entered into a definitive agreement to acquire Telefonica Costa Rica, one of Costa Rica’s largest mobile service providers.
The all-cash transaction values Telefonica Costa Rica at an enterprise value of $500 million on a cash and debt-free basis.
Referring to a 2018 investment in Cabletica, a leading fixed provider in the country, Balan Nair, president and CEO of Liberty Latin America, noted: “Combined with Cabletica, we look forward to creating a leading integrated communications player providing customers in Costa Rica with high-quality value propositions and unparalleled customer service.”
Telefonica Costa Rica is Costa Rica’s second-largest mobile service provider, with an estimated 2.3 million subscribers, and approximately 90 percent LTE population coverage.
This ends a long-running saga that looked like it might end badly after Millicom terminated its share purchase agreement to acquire Telefonica’s Costa Rican unit in May.
Despite Balan Nair’s comments, it’s not entirely certain what will happen next. However, with the strong local market presence and knowledge of Liberty Latin America behind it, Telefonica Costa Rica could be in a better position to compete with the state-owned operator Instituto Costarricense de Electricidad (ICE), which is the market leader.