Monday, 14 June 2021

CDPQ takes €1.6 billion stake in American Tower’s European business

by Harry Baldock, Total Telecom
Wednesday 05 May 21

The Canadian investment group is set to take a 30% stake in American Tower Company (ATC) Europe in a transaction worth €1.6 billion

Today, American Tower Corporations (ATC) has announced that they have struck a deal with Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ) for the sale of a 30% stake in their European business, ATC Europe.  The transaction will be for €1.6 billion, giving ATC Europe a total valuation of €8.8 billion. ATC will retain managerial and operational control of ATC Europe…

Today, American Tower Corporations (ATC) has announced that they have struck a deal with Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ) for the sale of a 30% stake in their European business, ATC Europe. 

The transaction will be for €1.6 billion, giving ATC Europe a total valuation of €8.8 billion.

ATC will retain managerial and operational control of ATC Europe, while CDPQ will gain seas on the company’s Board of Directors and certain governance rights. 

The deal comes a number of months after ATC signed a $9.4 billion deal with Telefonica to acquire their independent tower infrastructure company Telxius, which has tower assets in both Europe and Latin America. The acquisition, which is still pending, will see ATC’s European tower portfolio increase in size to around 30,000 communications sites.

"We are pleased to partner with CDPQ in Europe, where we expect to create tremendous value. CDPQ's extensive infrastructure experience, deep knowledge of the region and long-term investment philosophy are in close alignment with American Tower's European strategy, operational excellence and long track record of historical success,” said American Tower’s president and CEO, Tom Bartlett. “This transaction not only contributes to the funding of our pending Telxius acquisition, which will transform our scale and leadership position in highly attractive markets like Germany and Spain, but also creates a solid, adaptable framework through which future expansion opportunities can be evaluated and financed."

The deal is expected to close in the third quarter of 2021, subject to regulatory approval.

For CDPQ, this move represents their growing interest in the telecommunications infrastructure at an international level. While the fund already has various telecoms infrastructure assets under its wing, perhaps the clearest indication of their telecoms focus in recent years came in March earlier this year, when the pension fund stuck a deal with Telefonica to launch a 50-50 wholesale joint venture in Brazil, set to be named FiBrasil.

The investor’s interest in the telecoms sector has not gone unnoticed, with struggling Indian telco Vodafone Idea noting CDPQ as one of a number of pension funds they were approaching to help them raise $1 billion to stay afloat. 

Telecoms infrastructure investments have become a very hot topic over the past year, with operators around the world offloading their tower infrastructure in order to raise money for expensive fibre and 5G rollouts. Cellnex’s €9 billion purchase of CK Hutchison’s European tower assets last year was perhaps the trend’s biggest example, but there are numerous examples of similar transactions, from Vodafone preparing to float its tower subsidiary Vantage Towers, to MTN selling its towers in South Africa and Indosat selling theirs in Indonesia.  

 

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