Telefonica moved to increase its stake in infrastructure business Telxius through a deal with US-based investor KKR, seeking to tap submarine cable capabilities the Spanish operator branded key to digitalisation.

The operator and partner Pontegadea are buying the 40 per cent stake currently held in Telxius by KKR for €215.7 million.

After closing, the deal will leave Telefonica with a 70 per cent stake in Telxius, with the remainder held by Pontegadea.

Telefonica did not reveal a timeline for closing the transaction, which is subject to regulatory and competition approvals. The operator and Pontegadea hold their Telxius stakes via a joint venture called Pontel.

The deal is the latest in a series involving Telefonica and Telxius: in 2018, the operator sold a 40 per cent stake in the infrastructure unit to KKR for €1.3 billion.

At the time, Telxius also held Telefonica’s mobile tower assets in Europe and Latin America, along with other elements including the subsea cables.

The tower business was then sold to American Tower in 2021.

Reports in 2020 indicated Telefonica had tapped potential investors to assess a sale of the submarine units, but a deal apparently never materialised.

Telxius operates submarine fibre optic cables spanning almost 94,000kms and include key connections to the US from Europe and Latin America.

Telefonica described the submarine cables as “an asset that has proved critical during the pandemic”. Telxius Telecom currently has 93 points of presence and 27 landing stations in 23 countries.