Telefonica has taken another significant step in retreating from its Latin American operations. The telecom giant has agreed to sell its shares in Telefonica del Peru to Argentina’s Integra Tec International. This transaction is valued at just under $1 million due to the challenging circumstances surrounding the Peruvian unit.
This move involves the sale of Telefonica’s 99.3% stake in the Peru unit, while Integra Tec will acquire the remaining 0.7% through a public tender offer. The decision to offload these shares reflects the long-standing financial struggles of Telefónica del Perú, plagued by historic tax and regulatory issues. These challenges rendered it less competitive and the company accumulated debts amounting to €1.24 billion, which Integra Tec now inherits as part of the agreement.
As part of its broader strategy, Telefonica initiated voluntary bankruptcy proceedings for its Peruvian operations, writing down the business’s value by a substantial €314 million. This sale is a continuation of the company’s strategic pivot since 2019, focusing increasingly on Germany, Spain, Brazil, and the UK while pulling back from Central and South American markets.
This strategic retraction has led to divestments in smaller markets such as Guatemala and El Salvador. Deals in larger markets like the impending sale of its Argentinian unit to local competitor Telecom Argentina for $1.2 billion are undergoing regulatory scrutiny due to competition concerns. The company is also in talks for selling its Colombian unit and is actively seeking a buyer for its Mexican operations.
These moves underscore a significant restructuring in Telefonica’s portfolio as it aims to streamline operations and concentrate on more lucrative markets. While these divestitures might relieve some financial burdens, they also signal a significant shift in the company’s regional influence. For Latin America, this marks a substantial transition period with major players like Telefonica retreating, potentially creating new market dynamics.
