Mexico’s America Móvil has entered an agreement with Cable & Wireless Panamá (C&W), a Liberty Latin America and state-owned telecom operator, to sell its Claro Panamá business for US$200mn in cash. Liberty Latin America expects to close the transaction during the first half 2022, after which it plans to invest US$500mn “in the coming years,” according to a press release. The operation is subject to regulatory approvals. America Móvil, which is separating its tower business from its telecom operations, will keep its towers in Panama. The company will act as tower co-operator, sharing its passive infrastructure. It recently announced that corporate restructuring of this business has been progressing in the country.
The valuation for the acquisition is consistent with disciplined approach towards M&A and will be free cash flow accretive on a per share basis. This is the second major telecom M&A in Panama. In 2019, Millicom acquiredCable Onda and Movistar for over US$2bn. Millicom has recently announced a US$250mn investment in its fixed and mobile operations in Panama. Claro Panamá generated US$157mn of revenue in the fiscal year ended December 31, 2020. The company had 760,000 mobile subscribers by the end of June 2021. According to telecom regulator Asep, 5.7mn mobile lines were operating by end-2020 overall, of which 4.8mn prepaid.