Spanish telecommunications company Telefonica agreed to sell its stake in its Colombian unit to Millicom for $400 million as part of a strategy to gradually reduce its exposure to Latin America, it said Wednesday night.

The Spanish unit of Luxembourg-based telecommunications company Millicom will buy the 67.5% stake in Telefonica's Colombian unit, the two companies said in separate statements.

Telefonica has already divested from many Latin American markets, where returns were below the cost of capital, to focus on Spain, Brazil, the U.K. and Germany.

Newly appointed CEO Marc Murtra has said the company will complete a strategic review before the end of this year.

Last month, Telefonica sold its unit in Argentina and earlier this month some media reported that the company had begun the process of selling its units in Mexico and Peru.

(1 dollar = 0.9192 euros)

(Reporting by João Manuel Maurício in Gdansk; editing by Inti Landauro and Tomasz Janowski; Spanish edition by Mireia Merino)