2degrees to sell tower assets to Canadian business

The $1.08 billion deal involves 1,124 towers across Aotearoa and New Zealand

2degrees Mobile has agreed to sell its tower assets to Connexa, the independent mobile tower business that is partially owned by Spark New Zealand. The $1.08 billion deal involves 1,124 towers across Aotearoa and New Zealand.

In July, Spark sold a 70% stake in its towers network to Canadian investment fund Ontario Teachers’ Pension Plan for $900 million. Following this transaction, Connexa was formed, with Spark retaining a 30% stake. However, because Spark will not contribute equity to the acquisition, its shareholding in Connexa will be diluted from 30% to approximately 17% upon completion of the acquisition. Ontario Teachers’ Pension Plan, which is funding the deal, will see its shareholding increase to approximately 83%.

Under the terms of the deal, Connexa has committed to build or co-locate an additional 450 sites over the next 10 years and 2degrees will retain access to existing and new towers for 20 years, with the right of renewal.

“We believe that the addition of 2degrees’ passive mobile tower assets into Connexa will deliver greater operational efficiencies that will support more infrastructure sharing, better network economics, and faster deployment of new digital infrastructure across Aotearoa,” said Spark CEO Jolie Hodson. “We are pleased to continue to be a shareholder in a larger, and even more efficient business, and we look forward to working in partnership with Connexa as it delivers our new site build programme of 670 sites over the next 10 years. We are also pleased to expand the strategic relationship we have with Ontario Teachers’, with this transaction reflective of the long term, collaborative partnership we established with our tower sale earlier in the year.”

Not long ago, Vodafone New Zealand agreed to sell its network to a British-Canadian consortium comprised of British-based InfraRed Capital Partners and Canada-based Northleaf Capital Partners of Canada. The deal will leave local investor Infratil with a minority stake of 20%.

If both deals — Vodafone’s and 2degrees’ — are approved by the the Overseas Investment Office and Commerce Commission, virtually all of New Zealand’s mobile infrastructure will be owned by foreign investors.