Deutsche Telekom signed an agreement with Cellnex to merge their respective tower businesses in the Netherlands and establish a joint investment fund covering digital infrastructure across Europe.

In a statement, Cellnex said Deutsche Telekom’s T-Mobile Netherlands business would integrate 3,150 towers into its Cellnex Netherlands subsidiary, which will operate a total 4,314 sites in the country.

Cellnex and T-Mobile Netherlands plan to sign a 15-year provision agreement, which is automatically renewable for ten-year periods and includes a requirement to roll out 180 new sites over the next seven years.

The new business will be 62 per cent owned by Cellnex, with Deutsche Telekom holding the remaining 38 per cent.

Both companies will also become anchor investors in a newly established Digital Infrastructure Vehicle (DIV), focused on European digital infrastructure.

Deutsche Telekom will transfer its dedicated tower subsidiary T-Mobile Infra into the DIV, for which it will receive a €250 million cash payout and shareholding in the DIV.

In total, this translates to a capital commitment of €400 million into the fund by Deutsche Telekom, while Cellnex will commit a total of €200 million.

The companies explained the DIV will promote a range of infrastructure investments, including fibre, towers and data centres, “with the goal of delivering risk attractive-adjusted returns”.

It will be independently managed by a team of investment and capital market experts, led by investment group Deutsche Telekom Capital Partners co-founder Vicente Vento.

News of the tower tie-up follows rumours earlier this month that Deutsche Telekom was interested in offloading its Netherlands subsidiary in a deal which could be worth between €4 billion and €5 billion.