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Telefónica selling 40% of Telxius to KKR

Telefónica has reached agreement with global investment firm KKR Group for the sale of up to 40 per cent of Telxius Telecom, its global telecommunications infrastructure company, for a total amount of €1.275 billion.  Under the agreement, which is subject to regulatory approvals, Telefónica and KKR aim to develop and grow one of the leading global operators of telecom infrastructure including the development of planned new infrastructures.

Telxius owns and operates a portfolio of nearly 16,000 telecommunications towers in five countries. It also manages an international network with approximately 65,000 kilometres of submarine fibre optic cables, of which around 31,000 kilometres are owned by Telxius. Both business units benefit from attractive growth in their core markets, as the use of mobile data and the demand for reliable internet connectivity continue to grow rapidly, particularly in Spain and Latin America.

Following the deal, Telefonica will remain the anchor client for Telxius’ tower and cable businesses. It will keep a majority stake and operational control of Telxius and continue to consolidate it into its accounts. The sale is part of Telefonica’s strategy to optimise its asset portfolio and allocation of capital, and complements its plan for organic debt reduction.

Guillermo Ansaldo, chairman of Telxius said: “Our vision for Telxius is to capitalise on the exponential increase in data traffic forecast for the coming years by offering a first-class network in Europe and the Americas.  We are delighted to have KKR on board as a long-term investment partner. We believe their solid track-record on the infrastructure business will help us achieving our common goals”.

Jesus Olmos, Member & Global Co-Head of Infrastructure and Head of Spain at KKR, said: “The combination of Telefonica’s industrial expertise and KKR’s financial and operational support will help Telxius as it continues to scale and grow. We are confident that the exploding demand for mobile data, driven by the rise in 4k and virtual reality content, together with the need for reliable internet infrastructure will help drive strong growth in the business.”

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