Liberty Latin America, América Móvil to combine Chilean operations

DENVER, Colo. and Mexico City, Mexico – Liberty Latin America Ltd.("Liberty Latin America" or "LLA") (NASDAQ: LILA and LILAK, OTC Link: LILAB) and América Móvil S.A.B. de C.V. ("América Móvil" or "AMX") (BMV: AMX, NYSE: AMX and AMOV) announced an agreement to combine their respective Chilean operations, VTR and Claro Chile, to form a 50:50 joint venture (the "JV").

Strategic Rationale & Value Creation

The proposed transaction combines the complementary operations of VTR, a leading provider of high-speed consumer fixed products, such as broadband and Pay TV services, where it connects close to 3 million subscribers nationwide, and Claro Chile, one of Chile's leading telecommunications service providers with over 6.5 million mobile customers, to create a business with greater scale, product diversification, and a capital structure that will enable significant investment for fixed fiber footprint expansion and to be at the forefront of 5G mobile delivery. By 2025, the JV anticipates passing 6 million homes through its fixed network and the majority will have access to FTTH infrastructure.

The parties expect the JV will generate significant operating benefits and associated value creation, with estimated run-rate synergies of over $180 million, 80% of which are expected to be achieved within three years post completion. Most of these benefits relate to cost savings, driven by network and operating efficiencies resulting from the combination. In addition, parties expect the JV to develop additional revenue streams through cross-selling opportunities and scale.

LLA and AMX bring significant experience in the integration and execution of identified synergies in the context of in-country consolidations and convergence transactions in the region.

Neither LLA nor AMX will consolidate the JV after the closing. The formation of the JV will not result in a change of control event for existing debtholders of VTR.

Executive leadership of the JV will be agreed prior to the closing. The board will consist of eight persons, with four representatives from each of LLA and AMX. The role of Chairperson will rotate between the shareholders. Certain actions of the JV will be subject to the consent of both parties.

Completion of the transaction is subject to certain customary closing conditions, including regulatory approvals, and is expected to close in the second half of 2022. The transaction is not subject to LLA or AMX shareholder approvals.

Read the full announcement here.

Liberty Latin America