On May 2, Millicom announced it had terminated the share purchase agreement for the acquisition of Costa Rican Telefónica subsidiary, operating under Movistar brand. The telecommunications company, based in Luxembourg, noted that it was exercising its right to terminate the agreement, given that either party was entitled to withdraw from the deal if the pertinent regulatory approvals had not been issued by Costa Rican authorities by May 1, 2020.
Although most approvals had already been issued, including the authorizations granted by Sutel (Costa Rican Telecommunications Authority) and Coprocom (Costa Rican Committee for the Promotion of
Competition), Millicom pointed out that the CGR (Costa Rican General Controlling Agency) had not granted its authorization. Telefónica argues that CGR’S approval is not essential to close the deal. Before Millicom announced its decision, Telefónica had anticipated that it would sue Millicom in New York State courts for backing out of the agreement.
The Share Purchase Agreement was entered into in February 2019 for an aggregate amount of USD 1,650 million and included Telefónica units in Costa Rica, Panama and Nicaragua. In the last two countries, the transaction was closed without any difficulties.
Movistar is one of the main mobile service operators in Costa Rica; at the same time, it offers a VOIP service and a DTH service, which was commercially launched in 2018.