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Three parent CK Hutchison nears multi-billion euro mobile mast sale

5G
(Image credit: Huawei)

Three UK’s parent company CK Hutchison has confirmed it is in “advanced talks” to sell its European mobile masts for €10 billion to Cellnex but has yet to reach a decision on whether to go ahead with the deal.

There has been a flood of investments in the sector by private equity firms in recent years because of the predictable, stable revenues promised by assets such as fibre networks and mobile masts.

Meanwhile demand for ultrafast broadband and 5G means there is scope for growth.

CK Hutchison towers

This long-term view contrasts with the short-term pressures that network investment imposes on mobile operators who are in the middle of expensive network builds. An independent operator would also be able to agree deals with multiple operators, increasing revenues.

CK Hutchison’s operators currently require funding to build 5G networks while the conglomerate’s other businesses in ports and retail are suffering from the ongoing impact of the Coronavirus pandemic. A sale of towers would raise much needed capital.

In a submission to the Hong Kong Stock Exchange, CK Hutchison confirmed the talks but added the caveat that “no decision has been taken to proceed with any transaction and there can be no certainty that any transaction will proceed or, if it does, what the scope or terms of such transaction would be.”

Spanish-based Cellnex has snapped up a vast array of infrastructure assets over the past few months, recently securing deals for towers in Portugal and Poland. Earlier this year it also concluded a deal to with Arqiva to buy masts the UK’s largest independent network infrastructure operator.

Vodafone has also spun off most of its European tower assets into a separate entity and is planning an IPO for 2021.