Mergers & Acquisitions

Mergers & Acquisitions

July 21, 2011

American Tower and Millicom International Cellular Seals $182 Million Tower Deal

American Tower Corporation and Millicom International Cellular (News - Alert) S.A. recently announced a partnership deal, which is expected to strengthen both the companies’ position in the huge Columbian market. Under the agreement, Millicom’s subsidiary, Colombia Móvil, is going to sell up to 2,126 towers to ATC Infraco, a to-be-formed Colombian subsidiary of American Tower (News - Alert).

The purchase price has been fixed at $182 million in cash, the companies revealed in a press release.

In order to support Colombia Móvil's wireless network and future deployment plans, Colombia Móvil and ATC Infraco plan to enter into a long-term leasing agreement and build-to-suit agreement in the upcoming days. Under the arrangement, ATC Infraco will provide Colombia Móvil with wireless communications towers. Colombia Móvil expects to achieve significant savings in both capital and operating expenditures through this arrangement.

As for Millicom, the tower deal enables it to outsource its passive infrastructure and focus more on improving capital and operating efficiency by enhancing its core activities of sales, marketing, branding, distribution, service innovation and customer care. This, according to company officials, makes more sense in a large country such as Colombia.

The towers are expected to be transferred in a series of closings beginning during the fourth quarter of 2011, subject to customary closing conditions.

“This transaction solidifies our first partnership with Millicom and improves upon our current economies of scale in Colombia. As our customers in Colombia continue their focus on deploying wireless data networks, we believe our collocation model provides them with significant value through capex savings and time-to-market advantages. As a result, we believe this transaction further enhances our ability to maximize our market opportunity in Colombia,” James Taiclet, the chairman, president and chief executive officer of American Tower, explained in a statement.

Madhubanti Rudra is a contributing editor for TMCnet. To read more of her articles, please visit her columnist page.

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