Deutsche Telekom to sell 51% of towers business

  • Shock bid from Brookfield and DigitalBridge
  • Bid values entire of GD Towers unit at 17.5 bln euros

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

Brookfield (BAMa.TO) had originally assisted to fund a binding bid by Spanish telecoms agency Cellnex (CLNX.MC), ahead of Cellnex withdrew on Wednesday. browse extra

The German telecoms big will keep the remaining 49% stake of the GD Towers organization, with the deal predicted to shut towards the conclusion of the year.

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Proceeds of 10.7 billion euros will enable Deutsche Telekom lower financial debt, when it will work towards buying a majority share in its T-Cellular U.S. subsidiary.

“We crystalise the price of our tower assets, thereby generating value for our shareholders,” Deutsche Telekom CEO Tim Höttges stated.

Brookfield and DigitalBridge (DBRG.N) “have deep pockets for the coming steps,” Höttges additional, indicating their role in fostering field consolidation through a media briefing.

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

The offer is Germany’s largest this calendar year and Europe’s 2nd biggest, following the Benetton household and U.S. fund Blackstone’s (BX.N) 58 billion euro takeover of Italian infrastructure team Atlantia (ATL.MI). browse extra

The towers sale kicked off in March, drawing attention from heavyweight money investors together with U.S. buyout fund KKR (KKR.N) which teamed up with World-wide Infrastructure Associates (GIP) and Stonepeak on a rival bid. go through much more

Quite a few telecoms firms have carved out towers organizations, or introduced joint ventures with other corporations, to elevate revenue even though retaining a stake in functions.

Goldman Sachs suggested Deutsche Telekom on the sale, although Perella Weinberg Associates, Evercore and Barclays worked with DigitalBridge alongside regulation firms Allen & Overy and Morgan Lewis.

With all around 800 staff, GD Towers operates radio towers at much more than 40,000 locations in Germany and Austria. In 2021, the organization realized sales of around 1.1 billion euros.

Vodafone’s Frankfurt-stated towers organization Vantage Towers (VTWRn.DE) and American Tower (AMT.N) experienced regarded bids before in the auction method. go through extra

“The partnership getting formed these days is about making the subsequent technology digital infrastructure winner of Europe,” stated DigitalBridge CEO Marc Ganzi.

The infrastructure financial commitment company manages $47 billion of property targeted on digital infrastructure this kind of as wireless towers, data facilities and fiber networks.

($1 = .9981 euros)

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

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