Altice France and KKR will form a new entity dubbed SFR TowerCo
The European Commission has approved a deal in which U.S. investment company Kohlberg Kravis Roberts will acquire a stake in European cable group Altice’s telecom towers business in France.
In June, Altice Europe said its subsidiary Altice France had entered into an exclusivity agreement with KKR to form a new French company called SFR TowerCo, which will have assets including 10,198 sites operated by Altice’s French subsidiary SFR. The private equity firm will have a 49.9% stake in the new firm.
The European Commission said the proposed transaction does not raise competition concerns as KKR and SFR TowerCo do not have competing operations.
The proposed transaction values SFR TowerCo at an enterprise value of €3.6 billion ($4.22 billion). In addition, a build-to-suit agreement for 1,200 new sites between SFR and SFR TowerCo is expected to generate approximately €250 million in additional proceeds to SFR within the next four years.
Under the terms of the agreement, SFR and KKR will partner to operate and develop the largest independent tower company in France.
Altice previously has said that the transaction is expected to be closed in the last quarter of this year.
In June, Altice’s Portuguese subsidiary PT Portugal reached an agreement with a consortium including Morgan Stanley Infrastructure Partners and Horizon Equity Partners for the sale of 75% in a new company dubbed Towers of Portugal (ToP). The new company will own 2,961 sites currently operated by Altice Portugal. The transaction values Towers of Portugal at an enterprise value of €660 million. The deal also includes a build-to-suit agreement for 400 new sites between Portuguese carrier MEO, owned by Altice and ToP, which is expected to generate approximately €60 million in additional proceeds to MEO within the next 4 years.
The transaction has been structured on the grounds of a long-term partnership between PT Portugal and Towers of Portugal, while PT Portugal will reinvest to hold a 25% financial stake alongside the consortium, Altice Europe said.
The transaction, which also is subject to regulatory approvals, is expected to close during the third quarter of 2018.
Altice said that the transactions in France and Portugal, once realized, will generate significant proceeds for Altice Europe and that the future tower companies, whose perimeter will include passive infrastructure and equipment, will be well-positioned to offer shared passive infrastructure services needed to support the expansion in France and Portugal of wireless services using 4G/5G technologies. Altice also said that services will be available to all mobile network operators in France and Portugal.
