Spain’s Telefónica said its Telxius Telecom subsidiary has agreed to sell its mobile phone mast division in Europe and Latin America to American Tower Corporation for €7.7 billion in cash.
Telxius, partly owned by investment firm KKR and fashion tycoon Amancio Ortega’s investment vehicle Pontegadea, has about 30,700 mobile phone masts in Spain, Germany, Brazil, Peru, Chile and Argentina.
American Towers will then lease the phone masts back to Telefonica, leaving the Spanish group owning tower assets only in the UK.
“The capital gain attributable to Telefónica is estimated to amount to approximately [3.5] billion euros,” said Telefónica.
“Once the transaction is complete, the Telefónica Group’s net financial debt will be reduced by approximately [4.6] billion euros …”
Telefónica President José María Álvarez-Pallete said: “This is a deal that makes strategic sense within our roadmap.
“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 United Kingdom, the purchase of Oi mobile in Brazil and the reduction of debt”.
Telefónica added: “Following this operation, American Tower becomes Telefónica’s leading supplier in both Europe and Latin America and maintains its status as a partner in strategic projects in Brazil, Argentina and Colombia …”
American Tower said it expects to spend $500 million to construct a committed pipeline of 3,300 new sites in Germany and Brazil through 2025.
American Tower CEO Tom Bartlett said: “This transaction is transformational for our European business and will establish American Tower as one of the largest independent communications infrastructure providers in Europe.
“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.
“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.”