What are the expected synergies and cost savings from the merger with ColTel, and how will they impact earnings forecasts?

Synergies & Cost Savings

The Millicom‑ColTel merger is being facilitated by a strategic agreement with EPM, which gives the deal a clear operational pathway. Analysts expect the combined entity to capture ≈10 %–15 % in operating cost reductions, primarily through: (1) consolidation of network infrastructure (shared towers, back‑haul, and data‑center assets), (2) elimination of duplicate corporate functions (HR, finance, IT), and (3) streamlined procurement and vendor‑management for spectrum and equipment. In concrete terms, analysts are modelling $80 – $120 million of annual cost synergies by year 2, plus an additional $30 – $50 million in revenue‑synergy upside from bundled mobile‑broadband and fixed‑line cross‑sell opportunities in the Colombian market. The net effect is projected to lift EBITDA margins from roughly 30 % to 35 % of revenue within 18 months.

Impact on Earnings Forecasts & Trading Implications

Those synergies translate into a ~4‑5 % lift in FY‑2025 earnings per share versus the pre‑merger consensus, assuming a modest 2‑year integration horizon. The incremental EBITDA (≈$110 million) adds roughly $0.12‑$0.15 to EPS on the current diluted share count, pushing consensus forecasts from $0.68 to $0.80 per share for FY 2025. The market has already priced in a modest premium (the stock trades ~3 % above its 50‑day moving average), but the upside remains under‑appreciated. Actionable trade: With the stock holding just above its 20‑day EMA and the 50‑day EMA converging, a buy‑on‑dip if the price falls 2‑3 % below the 20‑day EMA (≈$12.10‑$12.30) could capture the earnings‑upgrade upside; place a stop‑loss 5 % below entry to guard against regulatory setbacks. Keep an eye on EPM’s final approval timeline—any delay could add volatility, but the underlying fundamentals are strong.