Panama's telecoms may merge to survive
January 23, 2019 |
Liberty-Millicom tie-up could create a dominant company in the local market and force other firms to join together to compete, sources say
Panama's telecommunications sector could see more M&A activity this year if Liberty Latin America makes good on its bid to buy Millicom International Cellular, which owns the regional mobile phone carrier Tigo, LatinFinance has heard.
"Panama has a very fragmented telecoms space, and a Liberty-Millicom tie-up would create a dominant player in cable, mobile and fixed-line services," an industry analyst said. "This will encourage other companies to enter joint ventures or merge to respond," the analyst added.
Liberty made a "highly conditional, non-binding proposal" earlier this month to buy Millicom for more than $7bn.
For Deury Pulgar, a corporate restructuring manager at the Panamanian accounting firm Auditaxes, Liberty's market dominance after the Millicom deal could convince Mexico's América Móvil to acquire Movistar's assets in Panama from the Spanish company Telefónica.
"Claro could buy Movistar to boost its customer network and grow its Claro TV presence, especially as Tigo recently acquired Cable Onda, bolstering its leadership in pay TV," Pulgar said.
América Móvil, which operates the Claro mobile carrier in 15 countries in the region, has been named as a possible buyer of Telefónica's assets in Central America.
Other telecom companies in Panama, including Digicel and Optynex Telecom, could seek partners if the Liberty-Millicom deal goes through, both sources said.