Telefónica has sold its Argentine operations for $1.25 billion to Telecom Argentina, prompting President Javier Milei to review the deal amid monopoly concerns. This sale aligns with Telefónica’s strategy to exit Latin America, as it faces scrutiny over market dominance. Despite Milei’s business-friendly policies, the exit reflects a broader trend of multinational companies leaving Argentina.
Telefónica SA has finalized the sale of its Argentine operations to Telecom Argentina SA for $1.25 billion. This transaction is part of Telefónica’s ongoing strategy to reduce its presence in Latin America, a process they have been pursuing since late 2019. President Javier Milei’s administration quickly announced a review of the deal due to concerns over potential monopolistic control, as the combined entity would dominate 70% of the telecommunications market in Argentina.
Milei, known for advocating reduced regulations, sees this sale as a significant regulatory concern. His administration’s scrutiny arises from the involvement of individuals connected to him and the significant market control the deal would create. Moreover, Milei has connections to executives who had interests in purchasing Telefónica, adding another layer of complexity to the transaction’s review.
Telecom Argentina’s acquisition was financed through a cooperative loan involving multiple banks, signaling the company’s strong financial backing. Despite the perception of a business-friendly climate under Milei, the exit of Telefónica is part of a larger trend of multinational companies moving away from Argentina during his administration. Companies like Exxon Mobil, HSBC, and Mercedes-Benz have also exited.
Historically, Telefónica was among the first multinational firms to invest in Argentina during the 1990s. Its presence in the country faced numerous economic challenges throughout the past three decades. The company is now refocusing its strategy by potentially selling off operations in other Latin American countries, including Mexico and Colombia.
The Spanish government has held a 10% stake in Telefónica since last year, indicating a continuing interest in overseas investments. With Marc Murtra taking over as Executive Chairman, the company is accelerating its restructuring to diminish dependency on Latin American markets and navigate through the economic uncertainties currently affecting the region.
The sale of Telefónica’s Argentine operations to Telecom Argentina for $1.25 billion marks a significant move in the shifting landscape of telecommunications in Argentina. President Javier Milei’s administration is set to review this sale over concerns of monopolistic control in the telecommunications sector. While the exit of Telefónica reflects ongoing corporate caution in Argentina under Milei, it also underscores the challenges faced by multinational firms in stabilizing their investments in the country.
Original Source: www.batimes.com.ar
