American Tower Corp is buying telecommunication towers in Europe and Latin America from Telefonica for €7.7-billion (R143-billion), signalling a new competitive threat in Europe’s fast-growing tower industry.
American Tower is paying cash to acquire around 30 700 tower sites from Telefonica unit Telxius Telecom, Telefonica said in a statement. The Spanish phone company expects to make a capital gain of around €3.5-billion.
US private equity firm KKR & Co owns 40% of Telxius and Spanish billionaire Amancio Ortega owns close to 10% through his investment vehicle.
The deal represents a shift in strategy for American Tower, which along with rival US operator Crown Castle International had largely stayed away from Europe, where phone companies are trying to raise money from their infrastructure to cut debt and pay for costly 5G rollouts.
Their absence has made it easier for Europe’s largest independent tower operator Cellnex Telecom to snap up assets across the region. Europe’s biggest wireless carrier, Vodafone Group, is working on an initial public offering of its tower unit in the first half of the year.
Telxius has towers in Spain, Germany, Brazil, Peru, Chile and Argentina. The sale is the biggest ever by Telefonica and will cut its net debt of around €37-billion by approximately €4.6-billion.
American Tower and Telefonica already have partnerships in Brazil in optic-fiber networks. — Reported by Jeannette Neumann, (c) 2021 Bloomberg LP
