UPDATE 1-Millicom, EPM eye telecoms merger in Colombia
* Colombian market growth chance for Millicom
* Sees debt levels staying low (Adds quotes, background)
STOCKHOLM Feb 5 (Reuters) - Emerging markets telecoms group Millicom International Cellular SA aims to boost its position in the fast growing market of South American country Colombia by merging its business with that of a regional operator, it said on Tuesday.
The company, 36 percent owned by Swedish investment group Kinnevik, generates about 40 percent of its revenues from operations in South America, including Colombia, where it owns the third biggest mobile operator.
It said in a statement it was in advanced talks with industrial conglomerate EPM in Colombia on the possibility of bringing EPM's operator, UNE EPM, which serves the area around second biggest city Medellin, with Millicom's Colombian operation, Tigo.
Millicom has 50 percent plus one share in Tigo, while EPM has 25 percent. EPM is also the largest shareholder in UNE EPM.
"The combination of a strong local partner with the international expertise of Millicom has provided a solid model in the past and will be even more important for the future," Millicom Chief Executive Hans-Holger Albrecht said.
The company provided no financial details, other than to say it did not expect the ratio of its consolidated net debt to rise above 1.5 times EBITDA (earnings before interest, tax, depreciation and amortisation) if the deal went ahead.
It said the aim of the deal would be for both sides to put in their respective telecoms businesses into a newly created business.
Millicom said in its latest financial report that Colombia was one of the most attractive growth opportunities for it.
Revenue in South America in third quarter of 2012 was $480 million, up 14.6 percent year-on-year in local currency.
Still, EBITDA was $181 million, a 4.6 percent year-on-year fall. It said the fall was due to an increase in investments to further grow its market share in data. (Reporting by Patrick Lannin; editing by Niklas Pollard)
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