Millicom International Cellular has jointly acquired Telefonica’s operations in Chile with NJJ, giving Millicom operational control.
The transaction strengthens Millicom’s presence in South America and increases its exposure to the Chilean telecom market.
The deal structure allows Millicom the option to fully own the Chilean asset over time.
For investors tracking NasdaqGS:TIGO, this move comes as the shares trade at $65.71. The stock has had a very large 1-year return and a 3-year gain of almost 3x. It is also up 160.8% over 5 years, reflecting a period of strong value creation for long-term holders.
Adding operational control in Chile expands Millicom’s footprint in a key South American market and could reshape how its regional portfolio looks over time. Readers may want to watch how management integrates the Chilean business, manages capital between this asset and existing operations, and communicates priorities for potential full ownership.
This Chile deal extends Millicom’s cable and mobile footprint into another sizeable South American market while limiting upfront strain on its balance sheet. With a 49% / 51% partnership and Millicom in charge of operations, the structure lets the company apply its operating playbook in Chile and, if execution is solid, consider moving to full ownership later. That matters for a business already active in markets like Colombia and Central America, where scale, bundled offers and cost control are key against regional players such as América Móvil and Telefónica.
The acquisition supports the existing narrative around using M&A in Latin America to build scale, diversify markets and improve earnings stability through more dollar-based or higher income economies.
At the same time, it adds to the concerns about high capital intensity, leverage and refinancing exposure, since absorbing another network requires ongoing investment and disciplined cash management.
The narrative focuses heavily on prior deals in Uruguay, Ecuador and Colombia, so the specific competitive dynamics and integration risks in Chile may not be fully reflected yet.
⚠️ Analysts have flagged four key risks, including interest coverage pressure and forecasts that earnings could decline on average over the next three years.
⚠️ Chile adds another market where competition from regional telecom groups may weigh on pricing and require sustained network spending to stay relevant.
🎁 The company is assessed as having attractive value characteristics, with the shares indicated as trading well below one independent fair value estimate.
🎁 Earnings growth over the past year has been very strong, giving management more flexibility to pursue selective deals like Chile while continuing to invest in core operations.
From here, keep an eye on how quickly Millicom stabilizes operations in Chile, any updates on exercising the option to buy out NJJ, and whether group leverage and interest coverage stay within management’s stated comfort zone. Investors may also want to track how the Chilean unit contributes to earnings and cash generation relative to existing markets, and how brokers update their views, given the current mix of Strong Buy and more cautious ratings. The upcoming quarterly results and management commentary may offer early signals on integration progress and capital allocation priorities across the region.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
