Deutsche Telekom agrees €17.5 billion towers unit sale

Deutsche Telekom has agreed a €17.5 billion deal to sell 51% of its towers business to a consortium made up of Canada’s Brookfield and US private equity firm DigitalBridge.

The consortium was not initially a runner in the contest for the share in GD Towers, with a group led by KKR most recently thought to be the favourite and Cellnex also tabling a bid (though the Spanish telco withdrew its offer earlier this week). However, this Canada-US consortium placed a surprise bid in the auction’s final stages which has been decided on as the best option.

The deal is expected to close by the end of 2022, with Deutsche Telekom retaining 49% of its tower business. The deal will also allow the German telco to reduce its financial debt by €10.7 billion at a time when it is looking to acquire a majority share in T-Mobile US. 

Announcing the sale, Tim Höttges, CEO of Deutsche Telekom, said: “Deutsche Telekom once again delivers on its strategic agenda. We crystalize the value of our tower assets, thereby creating value for our shareholders. At the same time the deal allows us to continue improving Deutsche Telekom’s undisputed network leadership in Germany and benefit from further value upside of the towers business through our retained 49 percent stake.”

GD Towers operates more than 40,000 sites in Germany and Austria with around 800 employees. It generated €1.1 billion of pro forma revenues in 2021, with EBITDA AL 2021 amounting to €640 million. Its CEO Bruno Jacobfeuerborn and CFO Thomas Ried will continue running the business after closing.

Marc Ganzi, CEO of DigitalBridge, said: “The combination of Deutsche Telekom’s leading mobile network and market position, alongside one of the largest real asset managers in the world in Brookfield, combined with the digital infrastructure domain expertise of DigitalBridge, creates a team of unmatched capabilities to support GD Towers as it grows to meet the evolving network demands of enterprises and consumers across Europe.”