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Millicom International Cellular SA TIGO

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Millicom Takes Control in Guatemala, Simplifying Its Structure; Shares Remain Attractive

Analyst Note

| Michael Hodel, CFA |

Millicom announced that it will acquire the 45% stake in its Guatemalan business that it doesn’t already own for $2.2 billion. The transaction brings full control of the firm’s largest operation and greatly simplifies its reporting structure. Because Millicom evenly split operating control with its partners in Guatemala, it hasn’t consolidated the business in its financial results, creating a messy and often confusing situation. The price paid looks reasonable to us, and we don’t expect to materially change our $64 fair value estimate and continue to believe the stock is undervalued.

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Company Profile

Business Description

Millicom offers wireless and fixed-line telecom services primarily in smaller, less congested markets or in less developed countries in Latin America. Countries served include Bolivia, Honduras, Nicaragua, Panama, El Salvador, Guatemala, Paraguay, Colombia, and Costa Rica. It also operates in Africa but has been selling out of African markets over the past couple years. Increasingly, it offers a converged package that may include fixed-line phone, broadband, and pay television in conjunction with wireless services.

2, Rue du Fort Bourbon
Luxembourg, L-1249, Luxembourg
T +352 27759101
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 21,000