Deutsche Telekom to sell 51% of towers business

LONDON/BERLIN, July 14 (Reuters) – Deutsche Telekom (DTEGn.DE) has agreed to market 51% of its towers business enterprise to a consortium of Canada’s Brookfield and U.S. personal fairness organization DigitalBridge after they produced a surprise previous-minute bid that valued the unit at 17.5 billion euros ($17.5 billion).

Brookfield (BAMa.TO) experienced initially served to fund a binding bid by Spanish telecoms business Cellnex (CLNX.MC), before Cellnex withdrew on Wednesday. study extra

The German telecoms giant will continue to keep the remaining 49% stake of the GD Towers business enterprise, with the deal envisioned to shut toward the finish of the year.

Proceeds of 10.7 billion euros will support Deutsche Telekom minimize debt, even though it is effective to getting a majority share in its T-Cellular U.S. subsidiary.

“We crystalise the value of our tower property, thus building price for our shareholders,” Deutsche Telekom CEO Tim Höttges stated.

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

Deutsche Telekom shares were down 1.6% at 1102 GMT.

The deal is Germany’s biggest this 12 months and Europe’s next largest, right after the Benetton relatives and U.S. fund Blackstone’s (BX.N) 58 billion euro takeover of Italian infrastructure team Atlantia (ATL.MI). browse additional

The towers sale kicked off in March, drawing awareness from heavyweight money traders like U.S. buyout fund KKR (KKR.N) which teamed up with Worldwide Infrastructure Partners (GIP) and Stonepeak on a rival bid. browse far more

A lot of telecoms companies have carved out towers enterprises, or released joint ventures with other corporations, to raise income when retaining a stake in operations.

Goldman Sachs encouraged Deutsche Telekom on the sale, although Perella Weinberg Companions, Evercore and Barclays worked with DigitalBridge along with legislation corporations Allen & Overy and Morgan Lewis.

With close to 800 workforce, GD Towers operates radio towers at additional than 40,000 spots in Germany and Austria. In 2021, the corporation realized profits of about 1.1 billion euros.

Vodafone’s Frankfurt-mentioned towers organization Vantage Towers (VTWRn.DE) and American Tower (AMT.N) had considered bids previously in the auction approach. go through far more

“The partnership currently being shaped these days is about setting up the subsequent era digital infrastructure winner of Europe,” explained DigitalBridge CEO Marc Ganzi.

The infrastructure expense organization manages $47 billion of property concentrated on digital infrastructure this kind of as wi-fi towers, data facilities and fiber networks.

($1 = .9981 euros)

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

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