American Tower Buys Telefonica Masts for $9.4 Billion
By
January 13, 2021
(Bloomberg) American Tower Corp. is buying telecommunication towers in Europe and Latin America from Telefonica SA for 7.7 billion euros ($9.4 billion), signaling a new competitive threat in Europe’s fast-growing tower industry.
American Tower is paying cash to acquire around 30,700 tower sites from Telefonica unit Telxius Telecom, Telefonica said in a statement. The Spanish phone company expects to make a capital gain of around 3.5 billion euros.
U.S. private equity firm KKR & Co. owns 40% of Telxius and Spanish billionaire Amancio Ortega owns close to 10% through his investment vehicle.
The deal represents a shift in strategy for American Tower, which along with rival U.S. operator Crown Castle International Corp. had largely stayed away from Europe, where phone companies are trying to raise money from their infrastructure to cut debt and pay for costly 5G rollouts.
Telefonica Unit Agrees to Sell Divisions to American Tower for EUR7 7 Billion morningstar.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from morningstar.com Daily Mail and Mail on Sunday newspapers.
Shares of
Telefonica (NYSE:TEF) jumped 10% on Wednesday after the Spanish telecom company agreed to sell its European and South American towers and related assets to
American Tower (NYSE:AMT). The deal makes sense for both parties, and as of this writing shares of American Tower are up slightly as well.
So what
On Wednesday Telefonica said its Telxius Telecom unit has agreed to sell towers in Spain, Germany, Brazil, Peru, Chile, and Argentina for 7.7 billion euros, or about $9.41 billion in cash. American Tower is buying 30,722 tower sites, with Telefonica cellular operators maintaining current lease agreements to continue to transmit from the towers.