Telefónica and Pontegadea buy 40% of Telxius from KKR for 215 million

Telefónica returns in its footsteps five years later to recover the Telxius submarine cables that it sold to the KKR fund. In November 2017, the telecommunications company transferred 40% of its infrastructure subsidiary to the US fund for 1,275 million euros -which included submarine cables and mobile phone towers- and now it is doing the opposite, although in this case in alliance with the Spanish Pontegadea and for an amount of 215.7 million euros.

The explanation for such a gap between the two purchase and sale operations responds to the absence of the telephone towers in the package, which Telefónica, Pontegadea and KKR sold to American Tower for 7,700 million euros just one year ago. From that sale to American Towers, the teleco chaired by José María Álvarez-Pallete received 3,850 million euros for 50.1% of its capital, while KKR injected 3,080 million euros for its 40% and Pontegadea another 770 million for the Remaining 20% ​​of the capital.

As explained by Telefónica through a statement to the CNMV, “the operation represents a clear commitment to submarine cables, which are assets with high potential for growth and industrial relevance in the new digital era.” The teleco considers that this type of infrastructure that unites continents from the bottom of the seas and oceans has demonstrated its critical value during the pandemic and that it will soon be equally decisive for the development of the metaverse, web3 and the new digital age.

According to the agreement now announced, Telefónica will increase its participation to 70% and Pontegadea will increase it to 30%. The same sources specify that the adjustments derived from the sale of the Telxius Telecom tower business to American Tower will be added to the amount of the operation.

Telxius Telecom boasts one of the largest cable networks with the greatest potential in the world, with an extension of 94,000 kilometers, including new generation systems such as Marea, Brusa and Mistral, as well as SAm-1, the system that connects from the year 2000 United States with Latin America.

Telxius Telecom also offers direct connectivity to the internet with very high capacity and speed with coverage of 93 points of presence and 27 docking stations in 23 countries, which makes it possible to successfully connect the United States, Latin America and Europe with the rest of the world. In addition, adds Telefónica, “Telxius Telecom has an extensive offer of capacity, colocation and security services.”