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 small business to a consortium of Canada’s Brookfield and U.S. non-public equity organization DigitalBridge right after they made a shock final-moment bid that valued the unit at 17.5 billion euros ($17.5 billion).

Brookfield (BAMa.TO) experienced at first helped to fund a binding bid by Spanish telecoms firm Cellnex (CLNX.MC), in advance of Cellnex withdrew on Wednesday. read additional

The German telecoms big will preserve the remaining 49% stake of the GD Towers small business, with the deal predicted to shut towards the conclusion of the calendar year.

Proceeds of 10.7 billion euros will assistance Deutsche Telekom lower debt, though it performs towards acquiring a the vast majority share in its T-Cellular U.S. subsidiary.

“We crystalise the benefit of our tower belongings, therefore developing price for our shareholders,” Deutsche Telekom CEO Tim Höttges explained.

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

Deutsche Telekom shares were down 1.6% at 1102 GMT.

The deal is Germany’s biggest this calendar year and Europe’s next greatest, immediately after the Benetton family members and U.S. fund Blackstone’s (BX.N) 58 billion euro takeover of Italian infrastructure team Atlantia (ATL.MI). browse more

The towers sale kicked off in March, drawing consideration from heavyweight money buyers together with U.S. buyout fund KKR (KKR.N) which teamed up with Worldwide Infrastructure Companions (GIP) and Stonepeak on a rival bid. read extra

Lots of telecoms corporations have carved out towers businesses, or introduced joint ventures with other businesses, to increase funds although retaining a stake in operations.

Goldman Sachs suggested Deutsche Telekom on the sale, whilst Perella Weinberg Associates, Evercore and Barclays worked with DigitalBridge together with legislation companies Allen & Overy and Morgan Lewis.

With close to 800 employees, GD Towers operates radio towers at much more than 40,000 locations in Germany and Austria. In 2021, the company achieved profits of all over 1.1 billion euros.

Vodafone’s Frankfurt-outlined towers organization Vantage Towers (VTWRn.DE) and American Tower (AMT.N) had viewed as bids earlier in the auction system. examine more

“The partnership becoming formed today is about constructing the next technology digital infrastructure champion of Europe,” claimed DigitalBridge CEO Marc Ganzi.

The infrastructure investment business manages $47 billion of belongings focused on digital infrastructure these types of as wireless towers, details centers and fiber networks.

($1 = .9981 euros)

Reporting by Emma-Victoria Farr in London and Matthias Inverardi in Duesseldorf
Crafting by Rachel Extra in Berlin Enhancing by Jacqueline Wong and Mark Potter

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