KKR’s Acquisition of Majority Stake in Telefónica Chile’s Fiber Optic Network

Latham & Watkins and Guerrero Olivos advised Telefónica S.A. on the deal, while Simpson Thacher and CMS Carey & Allende represented KKR. Philippi Prietocarrizosa Ferrero DU & Uría and Allen & Overy advised The Bank of Nova Scotia (Scotiabank); Scotiabank Chile; Banco de Crédito e Inversiones, BTG Pactual Chile, Banco Consorcio, Banco Internacional (Chile) and Banco Santander-Chile on the financingTelefónica S.A., a leading global telecommunications company, closed its agreement with global investment firm KKR to establish Chile’s first open access wholesale fiber optics company with the mission to bring greater broadband access across Chile.

Under the agreement, KKR will acquire a majority stake in Telefónica Chile’s existing fiber optic network, the largest fiber optic network in Chile, and make that network open access through a newly established independent Chilean company with assets managed locally. Telefónica will hold a 40% stake in the business. The newly formed enterprise will serve as Chile’s first wholesale digital infrastructure network open to all current and future telecom operators in Chile, creating a competitive marketplace benefitting consumers and businesses across the country.

The transaction is valued at approximately US$1 billion and is expected to close in the first half of 2021, subject to regulatory approvals.

KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate and credit, with strategic partners that manage hedge funds.

Telefónica, S.A. is a Spanish multinational telecommunications company headquartered in Madrid, Spain.[4] It is one of the largest telephone operators and mobile network providers in the world. It provides fixed and mobile telephony, broadband and subscription television, operating in Europe and the Americas.

The cross-border Latham team advising Telefónica was led by Madrid corporate partner Ignacio Pallarés (Picture) and New York corporate partner Tony Del Pino, with New York finance partner Guido Liniado and associates Alan Rozen, Carlos Ibarguengoitia, Carmen Esteban, María del Pilar Villanueva, and Noemí Abastá-Vilaplana.

In Chile, Guerrero Olivos advised Telefonica with Jorge Delpiano K., César Gálvez Tobar, Sebastián Marambio M.,  Roberto Burgos, Santiago Bustos, Matías Ríos Urquidi and  Daniela Ahumada B.

Simpson Thacher represented KKR with Breen Haire, Todd Crider, Karen McClendon, Ana Sanchez, Michael Spirtos, Alexander Gonzalez Castillo and Braxton Pitts (M&A); Adam Shapiro, Robert Meyer and Humberto Romero Carrillo (Credit); Nancy Mehlman and William Smolinski (Tax); and Étienne Renaudeau and Pauline Patat (Antitrust).

In Chile, CMS Carey & Allende advised KKR with Jorge Allende D., Ignacio Errazquin, Sebastián Barros Eyzaguirre, Ricardo Celedón Otero and Enrique Vergara Pabst.

In Chile, Philippi Prietocarrizosa Ferrero DU & Uría advised The Bank of Nova Scotia (Scotiabank); Scotiabank Chile; Banco de Crédito e Inversiones, BTG Pactual Chile, Banco Consorcio, Banco Internacional (Chile) and Banco Santander-Chile on the financing with a team including Marcelo Armas MacDonald, Daniel Parodi Nebreda, Macarena Soto and Santiago Mesías.

Allen & Overy also advised the banks on the financing.

Involved fees earner: Jorge Allende D. – CMS Carey & Allende; Ricardo Celedón – CMS Carey & Allende; Ignacio Errazquin – CMS Carey & Allende; Enrique Vergara – CMS Carey & Allende; Daniela Ahumada – Guerrero Olivos; Roberto Burgos – Guerrero Olivos; Santiago Bustos Plass – Guerrero Olivos; Jorge Delpiano Kraemer – Guerrero Olivos; César Gálvez Tobar – Guerrero Olivos; Sebastián Marambio Martínez – Guerrero Olivos; Matías Ríos – Guerrero Olivos; Noemí Abastá-Vilaplana – Latham & Watkins; Maria del Pilar Villanueva – Latham & Watkins; Tony Del Pino – Latham & Watkins; Carmen Esteban – Latham & Watkins; Carlos Ibargüengoitia – Latham & Watkins; Guido Liniado – Latham & Watkins; Ignacio Pallares – Latham & Watkins; Alan Rozen Porteny – Latham & Watkins; Marcelo Armas Mac Donald – Philippi Prietocarrizosa Ferrero DU & Uría; Sebastián Barros Eyzaguirre – Philippi Prietocarrizosa Ferrero DU & Uría; Santiago Mesías – Philippi Prietocarrizosa Ferrero DU & Uría; Daniel Parodi Nebreda – Philippi Prietocarrizosa Ferrero DU & Uría; Macarena Soto – Philippi Prietocarrizosa Ferrero DU & Uría; Todd Crider – Simpson Thacher & Bartlett; William Alexander González Castillo – Simpson Thacher & Bartlett; Breen Haire – Simpson Thacher & Bartlett; Karen McClendon – Simpson Thacher & Bartlett; Nancy Mehlman – Simpson Thacher & Bartlett; Robert Meyer – Simpson Thacher & Bartlett; Pauline Patat – Simpson Thacher & Bartlett; Braxton Pitts – Simpson Thacher & Bartlett; Étienne Renaudeau – Simpson Thacher & Bartlett; Humberto Romero Carrillo – Simpson Thacher & Bartlett; Ana Sanchez Restrepo – Simpson Thacher & Bartlett; Adam Shapiro – Simpson Thacher & Bartlett; William Smolinski – Simpson Thacher & Bartlett; Michael Spirtos – Simpson Thacher & Bartlett;

Law Firms: CMS Carey & Allende; Guerrero Olivos; Latham & Watkins; Philippi Prietocarrizosa Ferrero DU & Uría; Simpson Thacher & Bartlett;

Clients: Banco Consorcio; Banco de Crédito e Inversiones; Banco Internacional S.A. ; Banco Santander-Chile; BTG Pactual Chile SA; KKR; Scotiabank; Scotiabank Chile; Telefonica;

Federica Tiefenthaler

Author: Federica Tiefenthaler