Telefonica Sells Telxius Tower Division to American Towers for €7.7 Billion

Telefónica agreed to sell its subsidiary Telxius Telecom to American Tower Corporation for the sale of its telecommunications towers division in Europe and in Latin America. European division is located in Spain and Germany, while the one in Latin America is active in Brazil, Peru, Chile and Argentina. The company will be sold for an amount of €7.7 billion, payable in cash.

The agreement establishes the sale of a number of approximately 30,722 telecommunication tower sites and comprises two separate and independent transactions, setting the respective closings once the corresponding regulatory authorizations have been obtained. Among other aspects, the sale agreement provides for a commitment to the employment by ATC. On the other hand, the Telefónica Group operators will maintain the current leases agreements of the towers signed with the companies sold subsidiaries of Telxius Telecom, so that these operators will continue to provide their services in similar terms to the current ones. Renewal conditions do not include any additional “all or nothing“ clauses.

The Telxius tower business generated an estimated OIBDAaL over the past twelve months of approximately €190 million. If such number is adjusted to consider the full impact of the German portfolio acquired by Telxius in June 2020, the implied multiple over OBIDAaL pro forma would be 30.5 times. The capital gain attributable to Telefónica is estimated to amount to approximately €3.5 billion. Once the transaction is complete, the Telefónica Group's net financial debt will be reduced by approximately €4.6 billion and the leverage ratio by approximately 0.3 times.

"This is a deal that makes strategic sense within our roadmap. American Towers was our second supplier after Telxius". He added that "after this great operation we will continue to focus on our most ambitious objectives: the integration of O2 with Virgin in the United Kingdom, the purchase of Oi mobile in Brazil and the reduction of debt". Following this operation, American Tower becomes Telefónica's leading supplier in both Europe and Latin America and maintains its status as a partner in strategic projects in Brazil, Argentina and Colombia," said José María Álvarez-Pallete, the President of Telefónica.