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The company Millicom International Cellular decided to terminate the contract for the purchase of the operation in Costa Rica of the Spanish firm Telefónica, a deal that amounted to 503 million euros (about 570 million dollars).
Millicom indicates in a statement that it has exercised its right to terminate the Share Purchase Agreement (SPA) for the acquisition of the operation of the Telefónica subsidiary in Costa Rica ”.
The company, which in Costa Rica operates under the Tigo brand, justifies the decision in which the contract stipulated that if there are pending issues regarding regulations, as of May 1, either party may terminate the agreement.
The company did not detail what those issues are still pending.
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Telefónica announced last Wednesday that it will file a lawsuit in New York against Millicom for breaching the agreement, in order for it to proceed as agreed and to compensate it for the damages that this decision could cause to the Spanish operator.
For its part, Millicom ensures that it complied with everything agreed in the contract and that it will defend itself “vigorously” in the lawsuit.
On August 30, 2019, the Costa Rican Telecommunications Superintendency approved the sale of the operations in the country of Telefónica to the Millicom firm, as it did not find indications that the transaction involves potential anti-competitive effects in the Costa Rican market.
As of that authorization, the companies had to start the process of transfer of shares of the concession contracts for the radio spectrum frequencies before the Ministry of Science, Technology and Telecommunications (Micitt) as rector in the matter.
Telefónica announced in February 2019 the agreement with Millicom for the sale of its subsidiaries in Costa Rica, Panama and Nicaragua, with which the company will have completed the sale of all its operations in Central America upon completion.
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According to a relevant fact communicated to the National Commission of the Spanish Stock Market (CNMV), the aggregate amount of the operation is 1,650 million dollars, of which 570 million correspond to Telefónica Costa Rica, 650 million to Telefónica Panama and 430 million to Telefónica Nicaragua.
Tigo operates Internet, cable television, fixed telephony and mobile telephony services in Central America.
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