Cariola assists Claro in joint venture with Liberty

Cariola Díez Pérez-Cotapos has advised Claro Chile on its joint venture with Liberty Latin America

 Cariola Díez Pérez-Cotapos, together with Freshfields Bruckhaus Deringer (USA), has assisted América Móvil (Claro Chile) in the joint venture with Liberty Latin America (VTR) to combine their respective operations in Chile on a 50:50 basis.

In particular, the transaction combines the operations of VTR, a leading provider of high-speed fixed consumer products such as broadband and pay-TV services, where it connects close to 3 million subscribers across the country, and Claro Chile, one of Chile’s leading telecommunications service providers with more than 6.5 million mobile customers, to create a business with greater scale, product diversification and a capital structure that will enable significant investment for the expansion of the fixed fibre footprint and to be at the forefront of 5G mobile delivery.

As a result, it will be a company with 10 million customers at a time when Chile’s industry is preparing to begin 5G deployments that will involve millions of dollars of investment over the next few years. Together, they aim to have a fixed network that exceeds 6 million homes passed by 2025, most of which they say will be on FTTH, fibre-optic infrastructure, the fastest growing area in the industry.

To shape the partnership, Liberty Media and América Móvil “committed to contribute […] with a net debt of approximately 1.5 billion US dollars and 400 million US dollars, respectively”, the two companies said in a statement, while Liberty will pay América Móvil 100 million US dollars.

The JV was announced on 29 September, and the closing of the transaction, estimated for the second half of 2022, is subject to certain conditions, including obtaining regulatory approvals that must be approved by the Fiscalía Nacional Económica (FNE), and eventually by the Tribunal de Defensa de la Libre Competencia (TDLC) in Chile. Claro Chile (América Móvil) and VTR (Liberty Media) agreed to combine their operations in Chile through a joint venture, which will result in a new company offering fixed and mobile broadband services to almost 10 million customers.

Liberty (VTR) was advised by Carey (Chile) and Baker Botts (USA). In antitrust matters, VTR was advised by Ferrada Nehme (Chile) and Claro Chile was advised by Pellegrini & Rencoret (Chile).

Cariola’s team included partners Juan Pablo Matus (pictured top left), Tomás Vidal (pictured bottom left), Francisco Javier Illanes (pictured top center) and Javier Cerón (pictured bottom center), as well as associate José Tomás Espinosa (pictured left).