Global investment firm KKR Group will pay $1.35 billion to Telefónica for a stake in Telxius.
Telefónica reached an agreement with global investment firm KKR Group to sell up to 40% of Telxius Telecom, Telefónica’s telecommunications infrastructure division, for 1.28 billion euros ($1.35 billion).
Under terms of the agreement, which is subject to regulatory approvals, KKR agreed to acquire 24.8% of Telxius for 790 million euros, plus the option to purchase another 15.2% for 485 million euros. Provided the deal closes, the window to exercise the option will be in the fourth quarter. The transaction values the tower firm at 3.19 billion euros, or 12.75 euros per share.
Telxius, which was established in February 2016, owns and operates nearly 16,000 telecommunication towers in five countries and manages an international network with approximately 65,000 kilometers of submarine fiber optic cables, of which around 31,000 kilometers are owned by the entity.
Following close of the deal the Spanish telco will remain the anchor client for Telxius’ tower and cable businesses, and will also keep a majority stake and operational control of the entity. The sale is part of Telefónica’s strategy to optimize its asset portfolio and allocation of capital, and is said to complement its plan for organic debt reduction.
“Our vision for Telxius is to capitalize on the exponential increase in data traffic forecast for the coming years by offering a first-class network in Europe and the Americas,” said Telxius Chairman Guillermo Ansaldo. “We are delighted to have KKR on board as a long-term investment partner. We believe their solid track-record on the infrastructure business will help us achieving our common goals.”
