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Liberty Latin America to acquire AT&T’s Puerto Rico, USVI operations for $1.95B

By on October 9, 2019

Naji Khoury, president and CEO of Liberty Puerto Rico, and Balan Nair, president and CEO of Liberty Latin America (Courtesy)

Would create largest communications, entertainment provider in Puerto Rico 

SAN JUAN — Communications company Liberty Latin America (LLA). has entered into a definitive agreement to acquire AT&T Inc.’s wireless and wireline operations in Puerto Rico and the U.S. Virgin Islands for $1.95 billion, plus fees and expenses. The all-cash transaction is expected to close in the second quarter next year.

The transaction is subject to customary closing conditions, including reviews by the Federal Communications Commission and the Department of Justice. The “Acquisition Assets” provide consumer mobile and business-to-business services in Puerto Rico and the U.S. Virgin Islands, excluding DirecTV customers.

“In Puerto Rico, which represents approximately 90% of the revenue of the assets to be acquired, AT&T’s business is the leading provider of mobile services with the fastest network and a strong spectrum position, in addition to a well invested fiber backhaul network. Under the terms of the agreement, AT&T will support LLA for a period up to 36 months following the acquisition enabling the efficient transition of services,” according to a release.

The president and CEO of Liberty Puerto Rico, Naji Khoury sent a letter announcing the development to the media.

“By bringing both companies together, we will combine our amazing fixed high-speed broadband network, rated #1 by Speedtest by Ookla for two years in a row, with AT&T’s mobile network, also ranked by Oookla as fastest on the Island, in one national footprint. This combination will bring added benefits for customers of both companies and help build a more robust communications infrastructure for Puerto Rico and the USVI, with greater resilience and a stronger network,” Khoury wrote.

“Through this combination with AT&T, Liberty Puerto Rico will become an even stronger company, with greater reach and impact; with more resources to continue offering more innovative products…,” Khoury told its Puerto Rico customers via email, adding, “we look forward to continuing AT&T’s journey towards the deployment of 5G technology” on the island.

Following the acquisition, customers will continue to benefit from free roaming services between Puerto Rico,USVI and the mainland United States, Mexico and Canada, LLA said, adding it will continue providing enterprise services for AT&T’s business customers and support its FirstNet program for first responders in Puerto Rico and the USVI. 

LLA said it intends to finance the acquisition through a “combination of $2.2 billion in borrowings on the combined Acquisition Assets and Liberty Puerto Rico (including refinancing $922.5 million in existing term loans at Liberty Puerto Rico) and the remaining approximately $750 million from Liberty Latin America’s committed liquidity of $2.0 billion at June 30, 2019.”

Liontree LLC and Credit Suisse are acting as financial advisers to Liberty Latin America on the transaction. 

“With this combination, we will achieve: in-market consolidation with significant associated synergies, expand our product portfolio with the leading post-paid mobile network, add a predominantly subscription- based business, increase our distribution channels on the island, increase our B2B presence and materially increase our US dollar revenue weighting at LLA,” Balan Nair, president and CEO of Liberty Latin America, said in the release. “The combination of AT&T’s leading mobile businesses with Liberty Puerto Rico’s leading high- speed broadband and TV business will create a strong and competitive integrated communications player, with a combined annual revenue of over $1.2 billion  in Puerto Rico and $4.6 billion across LLA.” 

LLA operates in more than 20 countries under the consumer brands VTR, Flow, Liberty, Más Móvil, BTC, UTS and Cabletica, offering internet, telephony and mobile services. Its business products and services include connectivity, data center, hosting and managed solutions, as well as information technology solutions. In addition, it operates a sub-sea and terrestrial fiber optic cable network that connects more than 40 markets in the region.

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