BY Fraser Tennant
In a move which opens a new front in the race to control Europe’s fast-growing tower industry, multinational telecommunications company Telefonica has sold its mobile phone mast infrastructure unit Telxius to real estate investment trust American Towers Corporation for €7.7bn.
Under the terms of the agreement, American Towers will acquire approximately 30,772 telecommunications tower sites, comprising Telefonica’s European (Spain and Germany) assets, as well as its interest in Latin America (Brazil, Peru, Chile and Argentina).
The deal is part of the strategy and fulfilment of Telefónica’s strategy, which includes, among other objectives, an active portfolio management policy for its businesses and assets, based on value creation.
“This is a deal that makes strategic sense within our roadmap,” said José María Álvarez-Pallete, president of Telefónica. “American Towers was our second supplier after Telxius. After this great operation we will continue to focus on our most ambitious objectives: the integration of O2 with Virgin in the UK, the purchase of Oi mobile in Brazil and the reduction of debt."
Telefonica has also stated that it plans to use the proceeds of the sale, which include a capital gain of approximately €3.5bn, to reduce its net financial debt by €4.6bn.
“This transaction is transformational for our European business and will establish American Tower as one of the largest independent communications infrastructure providers in Europe,” said Tom Bartlett, chief executive of American Towers. “It is also complementary for our Latin American portfolio and positions us to drive strong long-term organic growth across both regions while augmenting our new build programs and enhancing our relationships with key tenants.”
The transaction is expected to close in the second quarter of 2021, subject to government and regulatory approvals and customary closing conditions.
Mr Bartlett concluded: “We are excited to broaden our partnership with Telefónica by acquiring a high-quality, well-located portfolio of sites that will further diversify our global footprint and enhance our ability to help provide broadband connectivity for billions of people.”
News: Telefonica sells mobile phone masts to American Towers for $9.4 bln