Dutch-based KPN is selling 2,000 of its mobile phone towers in Germany to American Tower for approximately $501 million. The Nov. 15 sales agreement is subject to approval by the German government. KPN’s German mobile subsidiary, E-Plus, will lease back the sites from American Tower.
The deal had “an attractive valuation” for KPN, according to company CFO Eric Hageman. “We are very pleased with this transaction,” Hageman said. It is in accordance with our strategy, as we do not consider the ownership and development of mobile towers to be a core part of our operations.”
The tower sale comes as KPN struggles to control its debt while at the same time looking to invest in the new mobile network roll out in Germany. The $501 million sale will result in an expected book gain of approximately $127.7 million.
Earlier this year KPN failed to block a share acquisition by Latin American carrier América Móvil, owned by Mexican billionaire Carlos Slim. América Móvil has been looking to expand its European presence and raised its stake in KPN to 27.7%.
Prior to the recent German tower sale, KPN also sold a large portion of its mobile towers in The Netherlands between 2008 and 2012, with the most recent sale in October.
The KPN deal comes on the heels of another major tower acquisition by American Tower. Telefónica’s Brazilian unit Vivo sold 1,500 of its towers to American Tower in October.
Boston-based American Tower owns and operates more than 50,000 sites in 10 countries. The company found the recent KPN tower deal particularly attractive as Germany is the largest wireless market in Europe with more than 100 million subscribers.
“We believe these sites represent a compelling investment for American Tower with strong day one cash flows and an opportunity to drive future collocation in a stable, growing wireless market,” explained Jim Traiclet, president and CEO of American Tower.
