Telefónica will sell its mobile masts to American Towers

Telefónica will sell its mobile masts to American Towers

The Spanish company Telefónica announced on Wednesday that it will sell its mobile masts in Europe and Latin America to the American telecommunications company American Towers for 7.7 billion euros in cash. The sale of almost 31,000 mobile masts, owned by its subsidiary Telxius in Spain, Germany, Brazil, Peru, Chile and Argentina, will bring the indebted Spanish giant a capital gain of 3.5 billion euros.

Strategic sales

Telefónica's president José María Álvarez-Pallete said the agreement would allow the company to focus on "the most ambitious goals", such as the merger of its mobile operator O2 with the British company Virgin, the purchase of Oi mobile in Brazil and debt reduction. "This is an agreement that makes strategic sense as part of our plan," he said in a statement. Telefónica announced at the end of 2019 that it would focus on its most lucrative markets - Spain, Britain, Germany and Brazil, and withdraw from less profitable markets, such as those in smaller Latin American countries, in order to better face tough competition.

Analysts welcomed the sale

The former state monopoly said it would use the proceeds of the sale to reduce debt by 4.6 billion euros. Telefónica's debt reached EUR 36.7 billion at the end of September. Under the terms of the agreement, American Towers will lease the telephone masts back to Telefónica, which owns a 50.1 percent stake in Telxius. Following the spin-off and sale of the mast division, Telxius' assets will consist mainly of submarine cable between Europe and the USA. Analysts at the Spanish bank Bankinter welcomed the agreement, calling it "very good news for Telefónica, which is succeeding in significantly strengthening the restructuring process by monetizing non-strategic assets."