Italian MNC Enel acquires 21% stake in Ufinet International for $175 million

The deal will enable Enel to expand its fibre optic operations to market overseas.

On Monday, Europe’s biggest utility Enel stated, it has agreed to acquire a 21% stake in Ufinet International, a Latin American fiber company, for $175 million (150 million euros).

The deal includes an option to buy the remaining shares from owner Cinven for 1.32-2.1 billion euros.

“This deal further strengthens our position as a leading infrastructure operator in the region,” said Francesco Starace, Enel’s CEO in a statement.

Incidentally, Enel, one of the biggest utilities in Latin America, also controls Spain’s Endesa. Earlier this month, it purchased a 73% stake in Brazilian power company Eletropaulo for $1.5 billion.

In Italy, Enel is in the process of rolling out a nationwide fiber optic network through Open Fiber, which it co-owns with CDP, a state lender.

“Enel X will benefit from our experience in Italy through the Open Fiber joint venture to develop wholesale ultra-broadband,” said Starace.

According to Enel, its call option of acquiring the rest of Ufinet could be exercised anytime between December 31, 2020 and December 31, 2021.

As per its agreement with Cinven, Enel will have a right to joint control of the broadband wholesale operator but will lose that right if it does not exercise the call option.

Incidentally, private equity firm Cinven acquired Ufinet in May 2018 through its Sixth Fund for an undisclosed amount.

In a separate statement, Ufinet said the partnership with Enel would allow it to create the biggest telecom infrastructure company in Latin America, taking advantage of Enel’s presence in the area.

It went on to add, the injection of new capital will enable it to expand its international reach through a series of acquisitions.

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