America Movil and Liberty Latin America announced a 50-50 joint venture to combine their Chilean operations, Claro Chile and VTR.
VTR, a leading provider of broadband and Pay TV services, connects close to 3 million subscribers nationwide. Claro Chile has over 6.5 million mobile customers.
The joint venture aims to make significant investment in fixed fiber footprint expansion and lead in 5G mobile business. By 2025, the JV anticipates passing 6 million homes through its fixed network and the majority will have access to FTTH infrastructure.
The JV will generate significant operating benefits and associated value creation, with estimated run-rate synergies of over $180 million, 80 percent of which are expected to be achieved within three years post completion. Most of these benefits relate to cost savings, driven by network and operating efficiencies resulting from the combination.
Executive leadership of the JV will be agreed prior to the closing. The board will consist of eight persons, with four representatives from each of LLA and AMX. The role of Chairperson will rotate between the shareholders.
Claro Chile owns a DTH business which VTR would be unable to operate as per restrictions imposed by the Chilean Antitrust Courts, following its acquisition of Metropolis in 2005. If these restrictions remain in place at the time of completion, the JV will take necessary step to comply with restrictions.