Telefonica agreed to sell a portfolio of towers in Europe and Latin America held by its Telxius subsidiary to infrastructure giant American Tower for €7.7 billion, as the operator group continues efforts to refocus its business.
The sale covers 30,722 towers across Spain, Germany, Brazil, Peru, Chile and Argentina currently held by Telxius, a subsidiary of Telefonica’s recently-formed infrastructure division.
Telefonica holds a 50.1 per cent stake in Telxius having taken outside investment in the unit in the years after its formation.
The operator noted it would make €3.5 billion from the transaction, cash it plans to use to reduce debt. As part of the sale, it agreed to continue existing leases on the infrastructure.
Following the divestment of its tower division, Telxius assets will comprise its submarine cable-focused business which operates around 100,000km of cable.
In a statement, Telefonica pointed to the transaction as being part of its attempts to revamp its business, with the company aiming to “to boost opportunities with the greatest growth potential, leveraging the value of our infrastructure; to increase agility and improve efficiency; and to create value with a long-term sustainable model”.
It has already sold a number of divisions and assets as part of the drive to focus on countries and technologies deemed key to its future.
Telefonica president Jose Maria Alvarez-Pallete (pictured) added: “This is a deal that makes strategic sense within our roadmap,” noting American Towers was already the company’s second-largest tower infrastructure supplier behind its own unit.
“After this great operation we will continue to focus on our most ambitious objectives: the integration of O2 with Virgin in the United Kingdom, the purchase of Oi mobile in Brazil and the reduction of debt,” the executive noted.
With the sale, Telefonica becomes the latest operator to cash-in on valuable infrastructure assets. A number of operators in recent years have signed sale and leasing agreements with specialist companies, while Vodafone Group spun-off its tower assets into a separate company it plans to IPO later this year.Subscribe to our daily newsletter Back