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. personal equity company DigitalBridge immediately after they designed a surprise very last-minute bid that valued the device at 17.5 billion euros ($17.5 billion).

Brookfield (BAMa.TO) had at first served to fund a binding bid by Spanish telecoms firm Cellnex (CLNX.MC), prior to Cellnex withdrew on Wednesday. read through much more

The German telecoms large will retain the remaining 49% stake of the GD Towers business, with the deal envisioned to close toward the finish of the 12 months.

Proceeds of 10.7 billion euros will enable Deutsche Telekom reduce debt, though it will work toward obtaining a majority share in its T-Mobile U.S. subsidiary.

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

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

Deutsche Telekom shares were down 1.6% at 1102 GMT.

The offer is Germany’s most important this calendar year and Europe’s second greatest, following the Benetton relatives and U.S. fund Blackstone’s (BX.N) 58 billion euro takeover of Italian infrastructure team Atlantia (ATL.MI). examine far more

The towers sale kicked off in March, drawing consideration from heavyweight monetary investors which includes U.S. buyout fund KKR (KKR.N) which teamed up with World wide Infrastructure Partners (GIP) and Stonepeak on a rival bid. read extra

Many telecoms firms have carved out towers enterprises, or released joint ventures with other businesses, to raise dollars while retaining a stake in operations.

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

With around 800 workforce, GD Towers operates radio towers at a lot more than 40,000 destinations in Germany and Austria. In 2021, the business realized revenue of close to 1.1 billion euros.

Vodafone’s Frankfurt-shown towers small business Vantage Towers (VTWRn.DE) and American Tower (AMT.N) had considered bids before in the auction approach. go through additional

“The partnership getting fashioned currently is about setting up the upcoming generation digital infrastructure winner of Europe,” said DigitalBridge CEO Marc Ganzi.

The infrastructure investment company manages $47 billion of assets targeted on electronic infrastructure this sort of as wireless towers, details facilities and fiber networks.

($1 = .9981 euros)

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

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