Panamanian regulator approves purchase of Claro by Liberty for $200 million

Panama City, 24 Mar The Panamanian Consumer Protection and Competition Authority (Acodeco) authorized the purchase of 100% of the shares of América Móvil SAB de C.V. in Panama (Claro Panama) by Liberty Latin America LTD, through its subsidiary Cable & Wireless Panama S.A. (CWP), a transaction of about 200 million dollars. Acodeco granted “conditional favorable concept to the operation of economic concentration between CWP and Claro, and mandatory corrective measures were established for the economic agents involved,” the regulator reported in a brief statement published on Thursday on its website. The regulator specified that “it may, at any time, without prior notice, carry out competition audits to monitor the behavior of CWP, in order to prevent monopolistic conduct and compliance with corrective measures, for a period of three years from the notification of the resolution,” which has already happened on last March 16, according to official information. Acodeco recalled that in September 2021 it was submitted a formal request for prior verification of economic concentration, whereby CW acquires 100% of Claro's issued and outstanding shares in the Republic of Panama. The telephone company Digicel Panama last year filed with Acodeco an opposition to the request for approval of the purchase and sale operation between Liberty and América Móvil, arguing that it was an alleged “illegal economic concentration” that would remove it from the market. This operation would lead to Digicel, “which has about 10% or slightly less, to have to leave the market, that is, we are going to go from having a market of four operators to having one of two operators, which was what existed 20 years ago in Panama,” lawyer Jorge Molina, representative of Digicel's legal representative, told Efe. Panama. In September 2021, CWP reported that it purchased 100% of Claro Panama's shares for $200 million, and announced “investments exceeding $500 million” to ensure that the “two networks that will be united” offer “a better service.” For its part, a statement from América Móvil, S.A.B. de C.V. then indicated that the agreement concluded with CWP for the sale of 100% of its subsidiary Claro Panama S.A. “excludes (i) telecommunications towers that are indirectly owned by AMX in Panama, and (ii) Claro brands.” “The agreed sales price is $200 million, adjusted for net debt at the closing date of the transaction (cash/debt free basis). The closing of the transaction is subject to certain conditions usual for this type of transaction, including obtaining regulatory authorizations. The parties expect the closing of the transaction to occur during the first half of 2022,” the business statement added. Claro has been operating in Panama since the end of 2008, and in fiscal year 2020 it had revenues of 157 million dollars, according to reports by the specialized publication Business Wire published by the local newspaper La Prensa. Cable & Wireless Panama is a joint venture (the State has 49% shareholders and workers have 2%), whose contributions to the Panamanian economy “will soon exceed 9 billion dollars”, according to company data.