Latin American Investors Seek to Control Telefonica's Hispanoamerica Unit

  By Carlos Lopez Perea 
 

A group of investors from Latin America have launched an offer to control a 51% stake in Telefonica SA (TEF.MC)'s Hispanoamerica unit, in a deal valued at "at least EUR10 billion," according to a report by El Mundo on Monday.

The offer entails the creation of a Latin American holding company to integrate Telefonica's Hispanoamerica unit, with local shareholders controlling a 51% interest, and Telefonica owning between 20% and 25%, El Mundo reported.

According to the newspaper, negotiations are currently at an early stage.

The transaction, which would include a stock flotation, wouldn't force Telefonica out of the region, where its presence is strategic not only for the company but also for the state, the newspaper added.

Telefonica wasn't immediately available for comment.

At the end of November, the Spanish company announced a plan to create a unit bringing together Telefonica's businesses in the Latin American countries where it currently operates, excluding Brazil. With this move, the company said it was attempting to "attract investors and capture synergies," pointing to a potential sale of its business in the region.

"Until a few years ago, our operations in Latin America were the driving force behind the company's growth. However, the particular conditions in these markets have had an impact on the business, reducing its contribution in recent years for various reasons, despite the enormous efforts of our local teams which have always shown a strong commitment, " the company's President Jose Maria Alvarez-Pallete said in a letter to shareholders.

This story was translated in whole or in part from a ​Spanish-language version initially published by EFE Dow Jones, a partner of Dow Jones & Co.

Write to Carlos Lopez Perea at [e-mail]

(END) Dow Jones Newswires

January 20, 2020 07:49 ET (12:49 GMT)

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