Vodafone New Zealand agreed to divest its passive mobile tower assets to funds managed by London-based InfraRed Capital Partners and Toronto-headquartered Northleaf Capital Partners, moving forward with a sales process kicked off in March.

In a statement, Vodafone NZ and its shareholders Infratil and Brookfield Asset Management explained the 1,484 towers are being sold for NZD1.7 billion ($1 billion). The towers are to be brought into a business dubbed TowerCo, of which each of the buyers will hold 40 per cent.

Infratil will reinvest proceeds from the sale to acquire a 20 per cent stake in the new entity. Vodafone NZ will continue to own the active parts of its network, including the radio access equipment and spectrum assets.

TowerCo will enter a 20-year deal with Vodafone NZ for access to existing and new towers. It has pledged to build at least 390 additional sites over the next ten years.

The transaction is expected to complete in Q4, subject to approval. Infratil and Brookfield Asset Management each own 49.95 per cent of the operator after Vodafone Group exited the New Zealand market in 2019.

Rival Spark New Zealand also recently began preparations to sell a stake in its new tower business to a third party, with plans to maintain a shareholding and be a long-term anchor tenant in the unit.