Deutsche Telekom is selling its GD Towers radio tower business to two North American partners. The Canadian Brookfield Asset Management and DigitalBridge from Florida, a specialist in digital infrastructure, are taking over 51 percent of the shares in GD Towers with a total valuation of around 17.5 billion euros. The DAX group is expecting income of around 10.7 billion euros, which will serve, among other things, to "debt the group".
"We make the value of our radio tower business visible and thus create value for our shareholders," said Telekom CEO Tim Höttges. Because the group will retain 49 percent of the GD Towers shares, it will also benefit from “further increases in value in the radio tower business”. According to Telekom, the group still has significant minority rights after the majority stake has been sold.
Telekom wants to use income to reduce debt
The Bonn group now wants to further apologize and accelerate the way towards the targeted majority stake of 50.1 percent in T-Mobile US.
With around 800 employees, the radio tower business GD Towers operates more than 40,000 locations in Germany and Austria. According to Deutsche Telekom, the company generated sales of around EUR 1.1 billion last year and adjusted operating profit was around EUR 640 million. The most important tenant of the radio towers is Telekom itself. According to the company, these leases will be continued on "beneficial" terms, including guaranteed access to strategically important locations and prioritized capacity for network modernization.
DigitalBridge and Brookfield bring tower business expertise and capital to further develop GD Towers' strategic plans, Telekom said. The group will continue to lease the locations.
The telecom business around the radio towers had also attracted numerous interested parties. According to insiders, a consortium led by the US financial investor KKR had also expressed an interest, and the Spanish company Cellnex and its partners also had their sights set on the radio towers in Germany and Austria. Ultimately, however, the two companies from North America were able to prevail, and their offer enables Telekom to continue to have a say in the business. In addition, it can benefit from future growth with its minority stake.
Telekom follows the competition
With the partial sale of its cell towers, Telekom is following its competitors Vodafone and Telefonica, who had spun off or sold their cell towers some time ago. Vodafone took its Funkturm subsidiary Vantage Towers public last year. The group still owns around 82 percent of the share capital. At Telefonica Deutschland, most of the radio towers belong to the US company American Tower, only a small part is still owned by O2.