DT and Cellnex Agree to Combine Tower Business in the Netherlands
Deutsche Telekom and Cellnex have signed an agreement to merge their respective Dutch mobile communications infrastructure companies into Cellnex Netherlands. Both companies will also become anchor investors in the newly established and independently managed Digital Infrastructure Vehicle, an investment fund focused on European digital infrastructure.
DT operates its Dutch telecommunications tower business in T-Mobile Infra, with around 3,150 towers and rooftop sites. The business of Cellnex comprises 984 cell sites. The enlarged company, with over 4,300 sites including planned new build of 180 sites, will be the largest independent cell mobile tower company in the Netherlands and will provide excellent geographic coverage. T-Mobile Netherlands will continue to have full access to the contributed infrastructure through a long-term service agreement at arm’s length.
In a first step DT is transferring T-Mobile Infra to the newly established and independently managed fund Digital Infrastructure Vehicle (DIV). The company will receive a €250 million cash payment out of the transaction and a shareholding in DIV in exchange for the T-Mobile Infra business. This translates into a capital commitment of DT of about €400 million to the fund. Cellnex has also agreed, as part of the transaction, to commit €200 million of capital to DIV. In a second step, DIV will contribute the received T-Mobile Infra business to Cellnex. In return, DIV receives approximately 38 percent economic interest in Cellnex.
In addition to the anchor investors DT and Cellnex, DIV will be open to institutional investors. DT intends to hold a limited partner stake of around 25 percent in the fund after the envisaged third-party investments. DIV will focus on promoting digital infrastructure investments across Europe into fiber, towers, and data centers, with the goal of delivering attractive risk-adjusted returns. DIV as a fund will be independently managed by a team of investment and capital market experts led by Vicente Vento, co-founder of Deutsche Telekom Capital Partners (DTCP).
"The agreement with Cellnex underlines the high value of passive mobile infrastructure. We are creating a leading tower company in the Netherlands, which should unlock synergies and accelerate our 5G rollout. At the same time, DIV opens an innovative way to finance telecom infrastructure in partnership with institutional investors," said Tim Höttges, CEO of Deutsche Telekom. "The Corona crisis has shown stable broadband connections are essential for people to communicate, both professionally and privately. That is why we are once again strengthening our commitment to digital infrastructure in Europe."