Cellnex has confirmed this Wednesday that it is abandoning the bid for a stake in the mobile phone tower business of Deutsche Telecom one day after the German newspaper advanced it handelsblatt, according to the statement sent to the CNMV. The abandonment of the Spanish company clears the way for the rival offer of KKR, backed by the American investment companies Global Infrastructure Partners (GIP) and Stonepeak, to take over the operation, estimated at 18,000 million euros.
The sale process, which began in March, has seen strategic bidders and infrastructure funds compete for a stake in the antenna unit known as Deutsche Funkturm GmbH. Cellnex offered Deutsche Telekom a small stake in its business as part of a binding offer that was backed by Canada’s Brookfield Asset Management.
The operation would be the largest in Germany this year and the second in Europe, after the acquisition of the Italian infrastructure group Atlantia by the Benetton family and the US fund Blackstone, for 58,000 million euros.
Deutsche Telekom wanted to retain some control of its tower business, which is why it has preferred investment funds to an industrial partner like Cellnex. This path already occurred in France when SFR and KKR created Hivory or in Spain, with Telefónica’s decision to initially allow KKR and Pontegadea, Amancio Ortega’s investment vehicle, to enter Telxius. Subsequently, in both cases, the owners sold the assets to industrial partners, Hivory to Cellnex and Telxius to American Tower.
In an environment in which interest rates are rising, Deutsche Telekom needs liquidity to cut a debt of almost 136,000 million euros. This would free funds to invest in infrastructure and ensure control of its T-Mobile unit in the United States, which represents more than 60% of the group’s sales.
Many telcos have spun off their tower businesses or launched joint ventures with independent companies, as a way to monetize some of the business and keep some for future profits. Deutsche Telekom worked with Goldman Sachs as an advisor in the sale of its 40,600 towers. Vodafone’s Frankfurt-listed tower business Vantage Towers, as well as American Tower, reportedly considered bids early in the auction process.
