Telecom Lead Europe: Millicom International Cellular has
inked an agreement with Rocket Internet to jointly develop franchises in the
online sector in Latin America and Africa.
Under the terms of the agreement, Millicom has the option
to gradually acquire controlling stakes in two subsidiaries of Rocket Internet
called Latin America Internet Holding and Africa Internet Holding.
Both subsidiaries of LIH and AIH develop and offer
services through franchises operating in 5 categories namely e-Commerce,
Marketplaces, Subscription, Lead Generation and Payments, in the largest
markets in Latin America and Africa.
With agreement allowing Millicom to control Rocket
Internet’s subsidiaries, it is expected that businesses of Rocket Internet will
be fully consolidated from closing and reported as a sixth category called
Online.
Mikael Grahne, Millicom’s President and CEO, said that
the company is happy to partner with Rocket Internet to develop an online and
e-commerce franchise in Latin America and Africa, where these promising sectors
are nascent.
At present, LIH and AIH control 8 operating businesses
with combined estimated revenues of circa EUR35 million in 2012. Both holdings
are required to launch a number of new businesses in Latin America and Africa
over the next 3 years.
Upon closing of the contract, Millicom will acquire a 20
percent stake in both LIH and AIH, through two reserved capital increases.
The agreement also allows Millicom to increase its stakes
up to 50 percent without management rights over 24 months. Additionally, Milliom
can also acquire the remaining 50 percent of these two holdings with full
management rights by no later than September 2016 at fair market value.
The total consideration to be paid to acquire the first
50 percent will be EUR340 million in three installments.
Millicom Cellular VAS revenue in Paraguay crosses voice income
Earlier, Millicom International Cellular generated more
revenue from Value Added Services (VAS) than from voice in one of its markets,
Paraguay, its test-bed for innovation.
