Brookfield Infrastructure Partners
BIP -0.24%
LP and
DigitalBridge Group Inc.
DBRG 0.20%
have agreed to buy a stake in
Deutsche Telekom AG’s
DTEGY 0.10%
tower business for roughly 6.6 billion euros, equivalent to $6.64 billion, raising their bet on a telecommunications sector that has seen a flurry of deal making in recent years.
The German telecoms company on Thursday said it had agreed to sell the consortium a 51% stake in GD Towers, its tower unit in Germany and Austria, valuing the entire business at €17.5 billion. Deutsche Telekom expects cash proceeds of €10.7 billion, including debt of €4.1 billion, from the deal.
The sale caps a yearlong effort to sell part of the business. GD Towers operates more than 40,000 sites across Germany and Austria.
“This represents a great opportunity to invest in a highly attractive tower portfolio, with highly contracted cash flows and strong upside potential,”
Sam Pollock,
managing partner at
Brookfield,
said. Brookfield has roughly 200,000 telecom tower and rooftop sites under management.
For Deutsche Telekom, the sale will give it more leeway to trim a net debt pile that stood at €135.95 billion at the end of March. The company said it expects a reduction in net debt, including leases, of €6.5 billion. Closing of the deal is expected toward the end of the year.
The German company will retain a 49% stake in the business and significant minority protection rights, including the right to appoint two of five members of the shareholder committee. Deutsche Telekom also has the right to regain control of the business should it wish to do so.
News of the deal comes after reports that a
KKR
& Co.-led consortium that included Stonepeak Infrastructure Partners LP and Global Infrastructure Partners LLC was close to signing an agreement with Deutsche Telekom.
For KKR, a deal would have marked its latest foray in the European telecommunications market. KKR bought a stake in a co-investment project with
Telecom Italia
SpA for €1.8 billion in 2020 and last year it had expressed interest in taking the company private, though a deal hasn’t materialized.
Spain’s
Cellnex Telecom SA
confirmed it had pulled out of the race, putting an end to speculation that it had made concessions to secure a share of the business.
Write to Mauro Orru at mauro.orru@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Brookfield Infrastructure Partners
BIP -0.24%
LP and
DigitalBridge Group Inc.
DBRG 0.20%
have agreed to buy a stake in
Deutsche Telekom AG’s
DTEGY 0.10%
tower business for roughly 6.6 billion euros, equivalent to $6.64 billion, raising their bet on a telecommunications sector that has seen a flurry of deal making in recent years.
The German telecoms company on Thursday said it had agreed to sell the consortium a 51% stake in GD Towers, its tower unit in Germany and Austria, valuing the entire business at €17.5 billion. Deutsche Telekom expects cash proceeds of €10.7 billion, including debt of €4.1 billion, from the deal.
The sale caps a yearlong effort to sell part of the business. GD Towers operates more than 40,000 sites across Germany and Austria.
“This represents a great opportunity to invest in a highly attractive tower portfolio, with highly contracted cash flows and strong upside potential,”
Sam Pollock,
managing partner at
Brookfield,
said. Brookfield has roughly 200,000 telecom tower and rooftop sites under management.
For Deutsche Telekom, the sale will give it more leeway to trim a net debt pile that stood at €135.95 billion at the end of March. The company said it expects a reduction in net debt, including leases, of €6.5 billion. Closing of the deal is expected toward the end of the year.
The German company will retain a 49% stake in the business and significant minority protection rights, including the right to appoint two of five members of the shareholder committee. Deutsche Telekom also has the right to regain control of the business should it wish to do so.
News of the deal comes after reports that a
KKR
& Co.-led consortium that included Stonepeak Infrastructure Partners LP and Global Infrastructure Partners LLC was close to signing an agreement with Deutsche Telekom.
For KKR, a deal would have marked its latest foray in the European telecommunications market. KKR bought a stake in a co-investment project with
Telecom Italia
SpA for €1.8 billion in 2020 and last year it had expressed interest in taking the company private, though a deal hasn’t materialized.
Spain’s
Cellnex Telecom SA
confirmed it had pulled out of the race, putting an end to speculation that it had made concessions to secure a share of the business.
Write to Mauro Orru at mauro.orru@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8