Deutsche Telekom announced on Thursday the sale of a 51% stake in GD Towers, which owns its tower assets in Germany and Austria, for an enterprise value of 17.5 billion euros (£ 14.81 billion ).
The German telecommunications giant said the sale to a partnership of DigitalBridge and Brookfield would provide both towers with the expertise and capital to accelerate GD Towers’ strategic plans for “enhanced” value creation.
Deutsche Telekom would retain the 49% stake in GD Towers, with “significant” minority protection rights, maintaining its exposure to future value upside.
A “favorable” framework lease agreement and the establishment of joint governance would allow Telekom Deutschland and Magenta Austria to retain their main lease.
Cash proceeds estimated at 10.7 billion euros would be used for group-level deleveraging at Deutsche Telekom and accelerating its trajectory to a 50.1% stake in T-Mobile US.
The company said the transaction is expected to close in late 2022.
“Deutsche Telekom is once again on track with its strategic agenda,” Chief Executive Tim Höttges said.
“We crystallize the value of our tower assets, creating value for our shareholders.
“At the same time, the agreement allows us to continue to enhance Deutsche Telekom’s undisputed network leadership in Germany and to benefit from further added value from the tower business through our retained 49% stake.”
As of 11:58 a.m. CEST (10:58 a.m. BST), Deutsche Telekom shares were down 1.74% at €18.86.
Reporting by Josh White on Sharecast.com.