Telxius acquires 10,100 sites from Telefónica Deutschland for €1.5bn

Telecommunications infrastructure company Telxius has reached an agreement with Telefónica Deutschland Holding AG for the acquisition of nearly 10,100 sites for €1.5 billion.
Javier Amantegui (top, left) Frederik Mühl (bottom) and Samir Azzouzi (top, right)

Telecommunications infrastructure company Telxius has reached an agreement with Telefónica Deutschland Holding AG for the acquisition of nearly 10,100 sites for €1.5 billion.


The agreement includes a commitment to build 2,400 additional sites.


Once the acquisition and the building programme are completed, Telxius tower portfolio will exceed 32,800 sites in the six countries where it operates, doubling its size since Telxius was created in 2016. Of these sites, approximately 80 per cent are located in Europe (Spain and Germany), while the remainder of the portfolio is in Latin America (Brazil, Peru, Chile and Argentina).


Telxius will finance 90 per cent of the value of the acquisition via a capital increase (to be subscribed by its current shareholders in proportion to their participation in the company) and by “internally generated resources”. The remaining 10 per cent will be financed through incremental debt. The transaction is structured in two phases: Telxius will first acquire approximately 60 per cent of the portfolio and the remaining 40 per cent by August 2021.


The acquired portfolio is mainly made up of rooftops and has growth potential, with a “current tenancy ratio of 1.04x and a wide presence in the main regions of the country, North Rhine-Westphalia, Baden-Wurtemberg and Bavaria, where 52 per cent of the acquired sites are located”, a Telxius statement said. It added: “Additionally, the portfolio is distributed in a balanced way between urban areas (45 per cent) and semi-urban and rural areas (55 per cent), effectively complementing the Telxius footprint in Germany, which was until now mostly rural (84 per cent).”


Mario Martín, CEO of Telxius, said: “This agreement marks an important transformation of Telxius’ profile. It consolidates us as a leading infrastructure company and we significantly increase our exposure to both the tower business and the largest European market. In addition, we ensure an extraordinary growth profile.”


KKR, which holds a 40 per cent stake in Telxius, was advised by Clifford Chance on the deal. The Clifford Chance multijurisdictional team was led from Madrid and Frankfurt by corporate partners Javier Amantegui, Frederik Mühl and Samir Azzouzi and senior associate Jorge Martín Sainz.


The team also included and included Daniel García, Laura Geli, Rodrigo Uría, Juan Puras, Jaime Almenar, Octavio Canseco, Gerd Hegele, Dennis Blechinger, Amrei Fuder, Dimitri Slobodenjuk, Christian Kremer, Mélissa Kdyem, Nina Aymé, Marc Mehlen, Veronika Kaszas and Tjasa Perger.


A cross-border Ashurst team from three jurisdictions, led by client relationship partner Amanda Hale, advised Telxius. The Frankfurt team advised on corporate, regulatory and competition issues, and the London and Sydney teams advised on the long term Master Lease Agreements under which Telefónica will access the acquired towers, and the built-to-suit (BTS) agreement under which Telxius will construct the 2,400 new towers. In London, digital economy team founders Nick Elverston and Amanda Hale and senior associate Noah Hong advised. In Germany, partners Benedikt von Schorlemer and Maximilian Uibeleisen led, supported by partners Michael Holzhäuser, Gerrit Clasen and Andreas Mauroschat, and counsel Holger Mlynek and Juditha von der Heydt. In Australia, partner Tim Brookes led a team including senior associate Kanin Lwin.


Telefónica was advised by CMS. The CMS team included Madrid managing partner César Albñana, partner Antonio Pino and counsel Rafael Sánchez.
 

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