European infrastructure company Cellnex struck agreements to acquire 24,600 telecoms towers and sites from CK Hutchison for €10 billion, increasing its foothold in Italy, the UK and Republic of Ireland, and expanding into three additional markets.
The announcement comes a week after CK Hutchison revealed it was in advanced talks with Cellnex over the deal to sell its European assets, which it spun off into a separate unit in August as it explored options for the division.
Cellnex stated the deal would be its biggest to date and strengthens its presence in its three existing markets, while adding Austria, Sweden and Denmark to its footprint.
The agreement comprises six separate transactions, one for each individual market. Of the €10 billion agreed, €8.6 billion will be paid in cash to CK Hutchison and the remaining €1.4 billion in Cellnex shares, representing 0.5 per cent of its share capital.
Cellnex and CK Hutchison also said they will sign long term service agreements for an initial period of 15 years, extendable for an additional 15 years.
For Cellnex, the deal continues an aggressive acquisition strategy to bolster its European presence.
It said it expects its revenue to increase by €1.2 billion to €3.8 billion after completion of planned rollouts, and committed to rolling out an additional 5,250 sites over the next eight years through an investment of €1.4 billion.
Future contracted sales are expected to grow by €33 billion to €86 billion, as a result of the pan-European agreements.
CK Hutchison’s strategy follows a number of operators which have decided to sell their tower assets, as part of a move to raise capital to fund investments into areas including 5G and reduce debt.
Cellnex CEO Tobias Martinez said the deal highlights the added value of the company “as a natural partner for all mobile operators in Europe”.
Closure of the deals are expected to be staggered, as they will need approval from competition authorities in each of the countries.
Should all the deals complete successfully, Cellnex will manage 103,000 towers and telecommunications sites in total.