Deutsche Telekom to sell 51% of towers business

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

Brookfield (BAMa.TO) experienced at first assisted to fund a binding bid by Spanish telecoms organization Cellnex (CLNX.MC), prior to Cellnex withdrew on Wednesday. read more

The German telecoms giant will retain the remaining 49% stake of the GD Towers organization, with the offer expected to close in direction of the conclusion of the yr.

Proceeds of 10.7 billion euros will aid Deutsche Telekom slice credit card debt, although it operates towards attaining a the greater part share in its T-Cellular U.S. subsidiary.

“We crystalise the price of our tower assets, therefore creating worth for our shareholders,” Deutsche Telekom CEO Tim Höttges claimed.

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

Deutsche Telekom shares had been down 1.6% at 1102 GMT.

The offer is Germany’s most significant this yr and Europe’s next most significant, just after the Benetton family members and U.S. fund Blackstone’s (BX.N) 58 billion euro takeover of Italian infrastructure group Atlantia (ATL.MI). browse much more

The towers sale kicked off in March, drawing awareness from heavyweight money traders such as U.S. buyout fund KKR (KKR.N) which teamed up with World wide Infrastructure Companions (GIP) and Stonepeak on a rival bid. read through much more

A lot of telecoms corporations have carved out towers corporations, or introduced joint ventures with other businesses, to increase money when retaining a stake in functions.

Goldman Sachs advised Deutsche Telekom on the sale, while Perella Weinberg Companions, Evercore and Barclays labored with DigitalBridge alongside law firms Allen & Overy and Morgan Lewis.

With all over 800 personnel, GD Towers operates radio towers at a lot more than 40,000 spots in Germany and Austria. In 2021, the corporation attained gross sales of all-around 1.1 billion euros.

Vodafone’s Frankfurt-listed towers enterprise Vantage Towers (VTWRn.DE) and American Tower (AMT.N) experienced considered bids previously in the auction procedure. read through a lot more

“The partnership being shaped nowadays is about creating the subsequent generation electronic infrastructure winner of Europe,” claimed DigitalBridge CEO Marc Ganzi.

The infrastructure financial investment agency manages $47 billion of belongings focused on electronic infrastructure these as wireless towers, knowledge facilities and fiber networks.

($1 = .9981 euros)

Reporting by Emma-Victoria Farr in London and Matthias Inverardi in Duesseldorf
Writing by Rachel Much more in Berlin Editing by Jacqueline Wong and Mark Potter

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