Vodafone Group inked an agreement to form a joint venture with investment companies KKR and Global Infrastructure Partners and divest its majority stake in Vantage Towers to it, with the operator set to net a minimum of €3.2 billion from the deal.
The venture will be a 50:50 partnership between Vodafone and the consortium made up of KKR and GIP.
Subject to regulatory approval, the entity will initially jointly own the 81.7 per cent share of Vantage Towers currently held by Vodafone. The deal values the whole of the business at €16.2 billion.
Assuming the transfer of ownership gets through regulators, the partners plan to make an offer to buy out minority investors. Vodafone indicated the second-largest minority shareholder RRJ Capital, which owns 2.4 per cent, had already committed to sell.
The long-anticipated deal to attract further investment in the tower company could net Vodafone up to €7.1 billion. The sum gained depends on the level of uptake of the proposition to Vantage Towers’ minority shareholders and whether its new partners can raise additional funds.
The agreement with KKR and GIP is subject to regulatory approval and is anticipated to close in H1 2023. Following closure, the consortium and Vodafone will be subject to a three year commitment not to sell any of all of their stakes.
In a statement, Vodafone noted the new JV aimed to grow the business including “capturing additional co-location opportunities from new and existing customers”, pursuing growth in adjacent sectors including small cells, DAS and edge computing.
It also intends to pursue an aim already cited by Vodafone CEO Nick Read, of “actively participating in the consolidation of the European tower landscape”.
Read called the JV deal a “landmark moment for both Vodafone and Vantage Towers”, which delivered on the operator’s aim to maintain joint control over “a strategically important asset, deconsolidating Vantage Towers from our balance sheet to ensure we can optimise its capital structure and generate substantial upfront cash proceeds for the group”.Subscribe to our daily newsletter Back