Future Fund leads consortium in A$2.8bn telecom deal

A consortium of super funds has agreed to acquire a 49% stake in Telstra’s considerable telecommunications towers portfolio in a deal expected to complete in Q3 this year.

Australia’s Future Fund is part of a consortium set to acquire a major stake in the country’s largest network of mobile tower sites.

The sovereign wealth fund – the consortium’s biggest investor – said it had joined forces with Queensland-based Sunsuper and the Commonwealth Superannuation Corporation to acquire 49 percent of Telstra’s InfraCo Towers, which owns and operates more than 8,000 tower assets including over 5,500 mobile towers throughout Australia, for A$2.8 billion ($2.1 billion; €1.8 billion).

Expected to complete in Q3 of this year, the deal gives InfraCo Towers an enterprise value of A$5.9 billion. Telstra is expected to retain the remaining 51 percent.

A spokeswoman for Morrison & Co, which manages the consortium, told Infrastructure Investor the investment manager and Future Fund had approached Telstra about the acquisition directly, ahead of the company’s planned sale of the major stake in its mobile telecommunications towers portfolio later this year.

Following the transaction announcement, it was reported the consortium would borrow A$800 million from Commonwealth Bank of Australia, National Australia Bank and Barclays to help fund the acquisition. Both Morrison & Co and Future Fund declined to comment on whether the banks would play a role in the deal.

Future Fund chief executive Raphael Arndt said: “We are a large investor in Australian infrastructure which plays an important role in our portfolio. This investment further strengthens our exposure to digital infrastructure and the long-term thematic of data growth.”

Arndt added that “this investment is a valuable fit with our focus on diversification across the portfolio”.

A spokeswoman for Morrison & Co told Infrastructure Investor: “Telstra InfraCo Towers’ assets are amongst the most strategic critical infrastructure assets in Australia.

“We believe the digital economy is central to the functioning of the country, and that it will be very important to economic growth. Good connectivity is more important than ever before.”