Millicom terminates Costa Rican takeover

4 May 2020

Millicom International Cellular (MIC) has announced that it has exercised its right to terminate the Share Purchase Agreement (SPA) for the acquisition of Telefonica’s operating subsidiary in Costa Rica, in accordance with the terms of the transaction. The closing of the deal was contingent on a number of regulatory approvals, certain of which were not issued by 1 May 2020 – the end-date set out in the SPA.

The USD570 million takeover of Telefonica Costa Rica (Movistar) – part of a larger USD1.65 billion deal, which also included assets in Panama and Nicaragua – was agreed back in February 2019 and received regulatory approval from Costa Rica’s Superintendency of Telecommunications (Superintendencia de Telecomunicaciones, Sutel) in September last year.

Late last month, frustrated at the lack of progress, Telefonica indicated that it would take legal action against Millicom to ensure compliance. In turn, Millicom hit back by citing the end-date and threatening to walk away if the deal was not concluded on time.