Spark New Zealand’s independent tower unit Connexa reached a deal to acquire 2degrees’ passive infrastructure across the country for NZD1.1 billion ($701.6 million), with the seller entering a 20-year leaseback agreement for access to existing and new sites.
The deal covers 2degrees’ portfolio of 1,124 towers and includes a commitment to build 450 sites over the next ten years.
In a statement, Spark CEO Jolie Hodson explained the company believes the acquisition will “deliver greater operational efficiencies” and back “more infrastructure sharing, better network economies and faster deployment”.
2degrees CEO Mark Callander added in a separate release the sale will allow it to “focus more on, and continue to invest in, innovative” services, while “realising the value of our passive mobile assets”.
The sale requires approval from New Zealand’s Commerce Commission and the Overseas Investment Office, and is expected to be completed by mid-2023.
Connexa was formed in October after Spark closed a deal to sell a 70 per cent stake in its tower business to the Ontario Teachers’ Pension Plan Board for NZD900 million.
Spark said it won’t contribute equity to the acquisition, which will result in its shareholding in Connexa being cut from 30 per cent to about 17 per cent once the deal closes.
The Ontario Teachers’ Pension Plan Board will fund the deal, with its shareholding increasing to about 83 per cent.
2degress is owned by Macquarie Asset Management and Aware Super.