LONDON\/BERLIN: Deutsche Telekom<\/a> has agreed to sell 51% of its towers business to a consortium of Canada's Brookfield<\/a> and U.S. private equity firm DigitalBridge<\/a> after they placed a surprise 17.5 billion euros ($17.5 billion) bid in the auction's final stages.
Brookfield had originally made a binding bid with Spanish telecoms firm Cellnex<\/a>, before Cellnex withdrew on Wednesday.
The German telecoms giant will keep the remaining 49% stake and the deal is expected to close towards the end of this year. It will reduce Deutsche Telekom's financial debt by 10.7 billion euros, the company said, as it works towards acquiring a majority share in its T-Mobile<\/a> U.S. subsidiary.
\"We crystalise the value of our tower assets, thereby creating value for our shareholders,\" Deutsche Telekom CEO Tim Hottges said.
\"They have deep pockets for the coming steps,\" he added, referring to Brookfield and DigitalBridge.
The deal is Germany's biggest this year and Europe's second largest, after the Benetton family and U.S. fund Blackstone's 58 billion euro takeover of Italian infrastructure group Atlantia.
The towers sale kicked off in March and a competing binding offer came from a consortium led by KKR, backed by U.S. investment firms Global Infrastructure Partners (GIP) and Stonepeak.
Many telecoms firms have carved out towers businesses, or launched joint ventures with other companies, to raise money while retaining an interest in the operations.
Goldman Sachs<\/a> advised Deutsche Telekom on the sale of its 40,600 masts.
Vodafone<\/a>'s Frankfurt-listed towers business Vantage Towers<\/a> and American Tower had reportedly considered bids earlier in the auction process.
\"The partnership being formed today is about building the next generation digital infrastructure champion of Europe,\" said DigitalBridge CEO Marc Ganzi. The infrastructure investment firm manages $47 billion of assets focused on digital infrastructure such as wireless towers, data centers and fiber networks.
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