Regional Players Map 2020 - Credit: © 2020 Convergencialatina
The spin-off of Telefónica Hispanoamérica and the sale of Oi in Brazil were protagonists in the 2020 M&A outlook in the region. Operations were around US$ 8,000 to US$ 10,000 million and three factors were observed: divestment of less attractive operations to reduce debt levels of global groups, subregional providers, and the entry of investment groups and separation of businesses that could be considered infrastructure and service businesses (segmentation). Telefónica managed to divest itself in 2019 of its subsidiaries in Panama, Nicaragua and Guatemala. But the operations to sell Costa Rica and El Salvador did not have the same luck: Liberty Latin America finally got the Costa Rican subsidiary, after a frustrated attempt to buy Millicom (which even Telefónica promises to bring to an arbitration award); and América Móvil withdrew from the acquisition of Movistar El Salvador, after the local antitrust entity imposed conditions. The rest of Telefónica Hispam remains intact. As part of the internal reorganization, the corporate head of the Hispam division was established, created at the end of 2019, turning the former Latin America Cellular Holding company into Telefónica Hispanoamérica SL. The goal is for all units in the region to have a common holding company, and thus facilitate a corporate operation with these assets. The focus announced by Telefónica for the Brazilian market a year ago is evidenced in its intention to acquire Oi, although as part of a consortium Claro and TIM. The sale of Oi Móvil could be completed before the end of 2020 and will generate a contraction of the Brazilian market, from four to three main operators. In parallel, Oi sold its Data Center and Tower businesses for a total of US$ 261 million: they were awarded, in the first case, to Titan Venture Capital, and in the second, to Highline, as a reflection of the growing footprint of funds investment in Latin America, and segmentation at the time of sale.
The regional operator that seems to have overcome the obstacles of the pandemic situation with the best results is Liberty Latin America, which made two purchases: AT&T's operations in Puerto Rico and the US Virgin Islands, for US$1.95 billion; and Telefónica Costa Rica, for US$ 425 million. This last operation strengthens the company in the strongest market in Central America, where in 2018 it had acquired Cabletica. Meanwhile, DirecTV remains at the center of rumors linked to the divestment of AT&T. Even more so after the drastic impact of disconnections in the framework of Covid-19 (590,000 only in the third quarter). The American company would be considering divesting minority shares - no more than 49% - in both DirecTV and AT&T Now. During 2020, it managed to finalize at least the sale of the Venezuelan subsidiary to Scale Capital.