Hong Kong billionaire Li Ka-shing’s CK Hutchison Holdings is poised to sell its European wireless towers business to Spanish mobile towers operator Cellnex Telecom for €10 billion (US$11.7 billion).
The company, which is run by Li’s son Victor Li Tzar-kuoi, was in advanced talks to sell 29,100 tower sites in the United Kingdom, Italy, Sweden, Denmark, Austria and Ireland, it said in a filing to the Hong Kong stock exchange on Wednesday.
CK Hutchison, which has businesses in retail, logistics and other sectors, hived off its European towers business into CK Hutchison Networks, a newly formed entity under CK Hutchison Group Telecom Holdings, in August, to manage the sites.
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The business faced a tough outlook, primarily in the UK, where mobile services providers have been banned from buying new equipment from Chinese giant Huawei Technologies after December 31, following sanctions against the company by Washington. They must also remove all of Huawei 5G equipment from their networks by 2027.
“The UK business faces tough prospects amid intensifying competition and the gradual swap out of Huawei Technologies’ 5G equipment. We expect higher capex as the government’s ruling requires removal of all 5G Huawei equipment from UK telco networks by 2027,” Fitch Ratings said in August.
Cellnex confirmed in a statement that it was in advanced discussions with CK Hutchison over “the potential acquisition of certain infrastructure assets and the execution of service contracts”. Both companies said that no decision had been taken to proceed with any transaction, and that there could be no certainty that any deal would happen.
If it goes through, the transaction will be the largest in the history of Barcelona-based Cellnex, boosting its towers footprint by about 40 per cent to beyond 100,000 sites. It will also paving the way for Cellnex to enter new markets such as Austria, Denmark and Sweden.
Moreover, Cellnex will provide telecommunication infrastructure services to CK Hutchison to support its 5G network roll-out, if the deal goes through.
CK Hutchison Group Telecom Holdings recorded €7.6 billion in revenue for the nine months through September this year, a decline of 4 per cent when compared with the same period last year, according to a separate filing with updated third-quarter figures to the Hong Kong exchange on Wednesday.
“[The market] landscape remained challenging for most of 2020, with consumer sentiment impacted by the pandemic,” the company said.
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