Swiss Life backs Cellnex’s landmark €430m telecoms deal

The transaction, also backed by Germany’s Deutsche Telekom Capital Partners, ensures Cellnex becomes Switzerland’s first independent operator of mobile telco infrastructure.

A consortium comprising Spain’s Cellnex, insurer Swiss Life and buyout firm Deutsche Telekom Capital Partners has agreed to pay €430 million for mobile telecom operator Swiss Towers.

Cellnex, owned 34 percent by Abertis, has taken the lead role in the group with a 54 percent share, while Swiss Life (28 percent) and DTCP (18 percent) have taken minority stakes in the company.

The acquisition will see the trio take over 2,239 mobile telecom tower sites in Switzerland from Zurich-listed firm Sunrise. The deal adds Switzerland to Cellnex’s 23,000-site European portfolio which already includes Spain, Italy, France, Netherlands and the UK. It also makes Cellnex Switzerland’s first foreign telecom infrastructure operator.

Cellnex chairman Francisco Reynés hailed the country’s “stable and secure” economic and political environment and said it now eyes opportunities to link its portfolio in a cross-border network.

The transaction is being financed through a €316 million equity contribution from the consortium, with a further €142 million provided in non-recourse debt. Cellnex said the deal also allows for subsequent consolidation in the country.

“Technological developments and the advance of digitalisation are leading to a growing demand for the infrastructure necessary to deal with floods of data,” said Stefan Mächler, chief investment officer of Swiss Life. “This transaction allows us to profit from these trends while posting attractive returns.”

Indeed, the Swiss mobile telecommunications market is expected to exceed a 45 percent year-on-year growth over the next five years as it eyes a continued rollout of 4G networks and the deployment of 5G.

Sunrise’s sale of its towers business continues a growing trend. KKR bought 40 percent of Telefónica’s towers subsidiary Telxius for €1.3 billion in February, while 3i Infrastructure and Abertis have pursued similar deals in the past couple of years.