Millicom to take full control of mobile operator Tigo Guatemala for $2.2 billion

(Reuters) - Telecoms service provider Millicom International said on Friday it had signed an agreement to gain full control of Tigo Guatemala by acquiring the remaining 45% stake from its local joint venture partner in an $2.2 billion all-cash deal.

Through the deal, which is the largest-ever single foreign investment in the Central American country according to the Financial Times, the Luxembourg-based company will own a 100% equity interest in mobile services firm Tigo.

The company said a group of leading international banks will provide bridge financing for the deal, adding, it intends to refinance the bridge with a planned issuance of about $1.5 billion of new long-term debt, and about $750 million of new equity through rights offering likely in the first quarter of 2022.

"For Millicom, this new investment reflects our continued confidence in the thriving economy of Guatemala and our renewed commitment to the digital transformation of its society," Chief Executive Officer Mauricio Ramos said in a statement.

The deal, which is expected to be significantly and immediately accretive to Millicom's cash flow, is expected to increase Millicom's equity free cash flow by about $200 million before incremental financing costs.

(Reporting by Rhea Binoy and Aakriti Bhalla in Bengaluru; Editing by Rashmi Aich)