Spanish telecommunications giant Telefónica SA has agreed to sell its Argentine operations to local firm Telecom Argentina SA for $1.25 billion.
The deal, signed and closed on Monday, marks Telefónica’s exit from Argentina after three decades in the country. However, President Javier Milei’s administration has announced a review of the transaction, citing potential monopolistic concerns, Bloomberg reported.
According to a regulatory filing, Telefónica has been working to reduce its exposure to Latin America since 2019. The sale of its Argentine unit is part of a broader restructuring effort under Executive Chairman Marc Murtra, who was appointed in January by the Spanish government. Telefónica has also recently sought bankruptcy protection for its Peruvian subsidiary and is reportedly considering divestments in Mexico and Colombia.
Despite Milei’s pro-business stance and commitment to deregulation, his administration is concerned that the deal would consolidate 70 percent of Argentina’s telecommunications market under a single entity. The president’s move marks his most significant regulatory intervention to date, underscoring the potential antitrust implications of the transaction.
The sale has also drawn attention due to Milei’s personal ties to figures who reportedly competed for Telefónica’s assets. His foreign minister, Gerardo Werthein, is a cousin of Darío Werthein, whose family holding company was among the interested buyers. Additionally, businessman Eduardo Eurnekian, Milei’s former employer, was also reportedly in the bidding process.
Telecom Argentina is partially owned by Grupo Clarín, one of Argentina’s largest media conglomerates, which Milei recently criticized for what he described as misleading coverage. Other stakeholders include financier David Martínez and a consortium of international banks. The acquisition was financed through loans from Banco Bilbao Vizcaya Argentaria SA, Deutsche Bank AG, Banco Santander SA, and the Industrial and Commercial Bank of China SAU’s Argentina branch.
The review of the deal comes amid broader concerns over foreign investment in Argentina. While Milei’s administration has attracted optimism from corporate leaders and Wall Street investors, the country has also witnessed a wave of multinational exits, including Exxon Mobil Corp, HSBC Holdings Plc, and Mercedes-Benz Group AG. Many companies remain cautious due to Argentina’s complex regulatory landscape, currency restrictions, and capital controls.
Argentina was one of the first Latin American markets Telefónica entered in the early 1990s, alongside Chile. Its presence in Argentina was part of a wave of privatizations that reshaped the country’s economy. However, repeated economic crises have made operating in the market increasingly challenging. The Spanish government, which owns a 10 percent stake in Telefónica, has supported the company’s strategic realignment, prioritizing divestments in certain Latin American markets.
As the Milei administration conducts its review, industry analysts will closely monitor whether regulatory concerns will lead to modifications in the transaction or potential legal challenges. The outcome will likely have significant implications for Argentina’s telecommunications industry and the broader investment climate in the country.
