Three owner CK Hutchison nears €10bn tower sale to Cellnex
The owner of mobile network Three today confirmed it is closing in on a €10bn (£9bn) sale of its European masts business to Spanish infrastructure group Cellnex.
In a stock market filing today, CK Hutchison said it had reached a “substantial agreement” with Cellnex on key commercial terms for the sale.
The Hong Kong-based group added that the deal, which covers roughly 29,000 telecoms masts in six European countries, would include agreements for the Spanish company to provide infrastructure services to support an accelerated rollout of 5G.
CK Hutchison warned that the deal had not yet been finalised and there was no certainty the transaction will go through.
The sale will spark speculation of further consolidation in the telecoms sector following Virgin Media’s proposed £31bn mega-merger with O2.
CK Hutchison’s attempt to merge Three with O2 in 2016 was blocked by EU regulators over competition concerns, though this decision was overturned in May.
It comes amid a growing trend of telecoms firms offloading their valuable masts businesses as fierce competition takes its toll on margins.
Earlier this year Vodafone announced plans to spin off its European mobile masts business and seek a stock market float for the unit.
The deal will also come as a boost to Cellnex, which last year snapped up more than 7,000 mobile masts from British rival Arqiva in a £2bn deal.
The Spanish company today posted a 53 per cent rise in revenue to €1.1bn in the first nine months of the year, while earnings before interest, tax, depreciation and amortisation frew 68 per cent to €838m.
Cellnex has pursued an aggressive growth strategy this year, taking over mobile masts in Portugal, Poland, the UK and France.
As a result, infrastructure services for telecoms operators now accounts for 78 per cent of the firm’s total income.