Telefónica completes sale of Telxius' tower business in Europe

Telefónica has announced the completion of the sale of Telxius' European tower division to American Tower Corporation (ATC), following regulatory approvals in Spain and Germany.

Telxius has received a payment of approximately €6.2 billion for the tower division in Europe. In August, ATC is also expected to acquire the towers that Telxius committed to acquire on that date, in execution of the second phase of the agreement between Telxius and Telefónica Germany.

This successful transaction demonstrates Telefónica's ability to face the challenges posed by the new reality, demonstrating anticipation and agility, as well as Telefónica Infra's capacity for execution, in the context of the company's new strategic plan.

In addition to concluding the sale of Telxius towers in Europe, Telefónica Infra has also launched, in the last few months, wholesale vehicles for the deployment of fibre in Germany -already operational-, and Brazil. In this way, the company is making progress in its objective of capturing new opportunities to create value from infrastructure assets, improving the competitive position of Telefónica's business units and capturing value from these same assets through co-investments.

Today’s towers transaction will reduce the company's net debt by approximately €3.4 billion, while the transaction scheduled for next August will result in an additional debt reduction of approximately €0.7 billion.

UK market leader

The completion of the sale of Telxius towers in Europe on Tuesday coincides with another important milestone for Telefónica, the birth of the combined O2, the UK's largest and most admired mobile platform, and Virgin Media, the UK's fastest broadband network. This marks the launch of the strongest fixed and mobile competitor in the UK market, for the benefit of consumers, businesses and the public sector.

The new company becomes one of the largest in the UK, with 47 million broadband, mobile, TV and home phone, and provides connectivity services, applications and digital solutions to tens of thousands of UK businesses and public sector organisations.

The joint venture is expected to generate substantial synergies for Telefónica, with a net present value of £6.2 billion, and become an integrated nationwide communications provider with £11 billion in revenues. The transaction will result in a debt reduction of approximately €5 billion.

Strategic plan execution

The transactions closed today, which took place in pandemic times, show the level of execution of the strategy announced by Telefónica in November 2019. The two operations are part of the Telefónica Group's strategy, focused on the active management of its businesses and assets, based on value creation and, at the same time, accelerating the organic reduction of debt.

Cash generated from both transactions, together with the inorganic operations still to be closed, will reduce the Group's net debt by approximately €9 billion.