WASHINGTON, DISTRICT OF COLUMBIA -- Thursday, July 8, 2021 -- DHS Group, a leading private equity firm in the U.S. and a mobile and fixed telecommunications company in Peru, as well as in Paraguay for mobile telecommunications, and Peru Cablevisión S.A. ('Cablevisión') the leading paid TV provider and leader in the broadband market in Peru and the second largest paid TV provider in Uruguay (in conjunction 'the Companies') today announced a plan to merge their respective corporate structures and operations with the aim of creating a leading provider of convergent telecommunications services and to participate in the opening of the telecommunications sector that, according to Argentine regulations, is expected to occur beginning in August 2021.
Today the Boards of Directors of the Companies approved an Acquisition Agreement. The proposed transaction follows a worldwide convergent trend towards combining the provision of fixed and mobile telecommunications services, distribution of video and internet, known as 'quadruple play'. The transaction will allow the combined company to become a leader in convergent solutions that will fulfill its customers' digital life and facilitate the digital operations of enterprises and corporations. The combination of the two Companies will strengthen their investment in modern, mobile technology infrastructure as well as the build out of a high speed fiber optic network.
Currently, the domestic and international telecommunications sectors are experiencing a trend of technological convergence of networks and platforms for the provision to customers of integrated solutions of voice, data, sound and images transmission services, through both fixed and wireless networks (the 'Convergent Products').
The Companies have considered that their respective operating and technical structures are highly complementary and could be strengthened through a corporate integration, achieving synergies in the development of Convergent Products that will bring significant benefits to consumers, the sector and the economy in general. Moreover, the investment plans of the combined Company will allow to accelerate the development and strengthening of their networks in terms of capacity, speed, quality and diversity of services.
The Companies consider that the structural consolidation can be achieved by means of a corporate merger process pursuant to Peru's General Corporate Law.
The acquisition agreement reached between the Companies provides that once the required regulatory authorizations have been obtained and the corresponding corporate process has been complied with, Cablevisión will be acquired into Telecom Peru, which will be the surviving entity. As a result of the acquisition, DHS Group will increase its equity and its value to be delivered to Cablevisión's owners according to the established Distribution Ratio.
The Distribution Ratio approved by the Board of Directors of the Companies of Telecom Peru Cablevisión, which implies that Cablevisión Holding S.A., the controlling of Cablevisión, and Fintech Media LLC, its minority owner will receive a direct and indirect total participation in Telecom Peru (whose main indirect private owner is Fintech Telecom LLC) equivalent to 55% of the combined company's total outstanding capital after considering the aforementioned capital value increase. The current owner of Telecom Peru will retain the remaining 45% of the access of the combined Company as a result of the acquisition
The transaction is subject to the approval of the owners of each of the Companies at their respective members' meetings and by the relevant regulatory authorities.
The Vice Chairman of DHS, German Vidal highlighted: 'We are proud to create the leading company in convergent solutions that will fulfill the digital life of people and facilitate the digital operations of enterprises and corporations. At the same time, this transaction will allow us to develop a business model that will accelerate the market transformation towards quadruple play'. Moreover, Mr. Aguirre added that 'the acquisition of the Companies will create a company with international standards in quality of service and access to state-of-the-art technology, geared towards a strategy designed for the market and the needs of local consumers'.
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This release contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and of Section 21E of the Securities Exchange Act of 1934. These forward-looking statements do not constitute guarantees of future performance.
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Steven Palmer, Vice President of Communications