MADRID: Spain’s Abertis Infraestructuras SA has said that it has agreed to buy 90% of the telecommunication tower business of Italy’s Wind Telecomunicazioni SpA for €693 million ($774 million).
Abertis, a Barcelona-based company with interests in sectors spanning toll roads, radio and TV broadcasting and telecoms, said it would become Europe’s largest operator of such towers following the deal.
For Wind, the deal serves as a way to generate cash for its parent, Russia’s major telecommunications company VimpelCom Ltd , which is looking to reduce its $20 billion debt load at a time when Russian firms face uncertainty when it comes to affordable access to capital markets.
In recent years, VimpelCom expanded in Italy, Asia and Africa. But the company already sold a majority stake in its Algerian subsidiary and in a Canadian unit last year. Wind is selling 90% of Galata, a subsidiary that owns 7,377 towers, while retaining the remaining 10%, Abertis and VimpelCom said in separate statements. The companies said they intend to close the transaction this quarter. Could you go Wi-Fi only and manage without a cellphone carrier? WSJ’s Ryan Knutson did it for 30 days and lived to tell about it. Here are some of his tips.
Abertis secured the deal in a bidding battle with EI Towers, Italy’s leading private tower operator and one of several European players in a sector that is quickly gaining traction. Following the sale, Wind will enter into a so-called Tower Services Agreement for an initial term of 15 years with Galata for the provision of a broad range of services. This effectively means the telecom operator rents the use of the towers from Abertis, which receives regular payments in exchange for maintaining the service.
Abertis is a relative newcomer to the business. The company first became an operator of TV broadcasting towers in 2003, when the state-owned operator was privatized, and now owns most of such towers in Spain. It then moved into the telecom towers business in 2013, by purchasing a large number from local telephony operators Telefónica SA and Yoigo SA. Abertis already owns more than 4,000 telecom towers in Spain, and around 3,000 radio and TV towers. The company is preparing the transfer of all its telecom towers to a separate company to be listed on Madrid’s stock exchange, a person close to the situation said last month.
