Spark NZ confirms Connexa to acquire 2degrees’ tower assets


Connexa, the independent mobile towers business in which Spark New Zealand (“Spark”) is a shareholder, has reached an agreement with 2degrees Mobile (“2degrees”), an entity owned by managed funds of Macquarie Asset Management and Aware Super, to acquire 2degrees’ passive mobile telecommunications tower assets.

Connexa is an independent mobile towers business that was formed following the sale of a 70% stake in Spark’s passive mobile infrastructure assets to the Ontario Teachers’ Pension Plan (Ontario Teachers’)
in July 2022, with the transaction completing in October 2022.

The tower portfolio to be acquired by Connexa includes 1,124 mobile towers located across Aotearoa New Zealand. Under the terms of the deal, 2degrees has entered into a 20-year-agreement with Connexa (plus rights of renewal) to secure access to existing and new towers, with an additional tower build and co-location commitment of 450 sites over the next 10 years.

Spark will not contribute equity to the acquisition, which will result in its shareholding in Connexa being diluted from 30% to approximately 17% (of the resulting larger business) following completion of the acquisition. Ontario Teachers’ will provide funding for the deal and its shareholding will increase to approximately 83%.

Spark will retain its existing governance rights including Board representation and benefits from the value accretive expansion of the business.

Spark CEO Jolie Hodson says, “We believe that the addition of 2degrees’ passive mobile tower assets into Connexa will deliver greater operational efficiencies that will support more infrastructure sharing, better network economics, and faster deployment of new digital infrastructure across Aotearoa.

“We are pleased to continue to be a shareholder in a larger, and even more efficient business, and we look forward to working in partnership with Connexa as it delivers our new site build programme of 670 sites over the next 10 years. We are also pleased to expand the strategic relationship we have with Ontario Teachers’, with this transaction reflective of the long term, collaborative partnership we established with our tower sale earlier in the year.”

Completion is subject to customary approvals from the Overseas Investment Office (OIO) and Commerce Commission and is anticipated to occur mid-2023. Jarden has been appointed as financial advisor to Spark on the transaction.