Deutsche Telekom to sell 51% of towers business

LONDON/BERLIN, July 14 (Reuters) – Deutsche Telekom (DTEGn.DE) has agreed to offer 51% of its towers business to a consortium of Canada’s Brookfield and U.S. private equity organization DigitalBridge following they built a surprise very last-minute bid that valued the unit at 17.5 billion euros ($17.5 billion).

Brookfield (BAMa.TO) had at first helped to fund a binding bid by Spanish telecoms agency Cellnex (CLNX.MC), before Cellnex withdrew on Wednesday. study much more

The German telecoms giant will maintain the remaining 49% stake of the GD Towers company, with the offer predicted to close towards the end of the yr.

Proceeds of 10.7 billion euros will assistance Deutsche Telekom cut financial debt, though it is effective in the direction of buying a bulk share in its T-Cell U.S. subsidiary.

“We crystalise the worth of our tower property, thus making value for our shareholders,” Deutsche Telekom CEO Tim Höttges explained.

Brookfield and DigitalBridge (DBRG.N) “have deep pockets for the coming steps,” Höttges extra, indicating their function in fostering marketplace consolidation in the course of a media briefing.

Deutsche Telekom shares ended up down 1.6% at 1102 GMT.

The offer is Germany’s most important this year and Europe’s second premier, right after the Benetton household and U.S. fund Blackstone’s (BX.N) 58 billion euro takeover of Italian infrastructure team Atlantia (ATL.MI). study much more

The towers sale kicked off in March, drawing attention from heavyweight monetary investors which includes U.S. buyout fund KKR (KKR.N) which teamed up with World Infrastructure Partners (GIP) and Stonepeak on a rival bid. examine additional

Lots of telecoms firms have carved out towers businesses, or launched joint ventures with other providers, to increase funds whilst retaining a stake in functions.

Goldman Sachs recommended Deutsche Telekom on the sale, though Perella Weinberg Partners, Evercore and Barclays labored with DigitalBridge alongside regulation companies Allen & Overy and Morgan Lewis.

With about 800 workers, GD Towers operates radio towers at more than 40,000 destinations in Germany and Austria. In 2021, the company achieved profits of about 1.1 billion euros.

Vodafone’s Frankfurt-outlined towers small business Vantage Towers (VTWRn.DE) and American Tower (AMT.N) experienced thought of bids before in the auction method. study additional

“The partnership currently being fashioned these days is about setting up the next generation digital infrastructure champion of Europe,” mentioned DigitalBridge CEO Marc Ganzi.

The infrastructure investment decision organization manages $47 billion of property focused on electronic infrastructure this sort of as wi-fi towers, data facilities and fiber networks.

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