KKR & Co Inc., Global Infrastructure Partners and Stonepeak Partners have jointly submitted a binding offer for a majority stake in the 20 billion euro radio masts division of Deutsche Telekom AG, as people familiar with the matter report.
They are competing with a consortium formed by Canadian investment firm Brookfield Asset Management Inc. and Spain’s Cellnex Telecom SA, which have made a confirmatory offer for part of Deutsche Telekom’s business, according to the people, who asked not to be named.
The discussions are still ongoing and other bidders could emerge, the people said. Vodafone Group Plc’s listed infrastructure division, Vantage Towers AG, is interested in Deutsche Telekom’s towers and could make an offer on its own or with a partner, one of the people said. Also, the investment firm DigitalBridge Group Inc. has reviewed the business area, as Bloomberg News reported back in May.
Representatives from Brookfield, Cellnex, Deutsche Telekom, Stonepeak and Vantage declined to comment. Spokesmen for KKR and GIP did not immediately respond to requests for comment.
For Europe’s telephone companies, ownership of these network infrastructures was once an important part of their business model. Under pressure to raise cash and reduce the cost of new network investments, they have begun to spin off their cell towers into separate units or sell them altogether.
Private equity firms are attracted to the telecommunications infrastructure because it is able to generate steady, long-term returns. KKR has raised $17 billion (16.3 billion euros) this year for its latest global infrastructure fund, while GIP is targeting $25 billion for the world’s largest capital pool for infrastructure investments.
Cellnex, Europe’s largest mast operator, already owns masts in Switzerland and the Netherlands together with Deutsche Telekom. Germany is the only major European market where Cellnex has not yet been able to establish a presence.