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Cellnex to acquire Arqiva's telecom unit for £2B

Cellnex Telecom SA will acquire the telecom division of British communications infrastructure operator Arqiva Group Ltd. for about £2 billion, the companies said Oct. 8.

The transaction includes masts and towers housed in about 7,400 mobile network sites, as well as the rights to market about 900 more sites across the U.K. The towers serve Britain's four mobile operators under contracts with Cornerstone Telecommunications Infrastructure Ltd., a joint venture between Vodafone Group PLC and Telefónica SA, and Mobile Broadband Network Ltd., which is jointly owned by Hutchison 3G UK Holdings Ltd. and British Telecom unit EE Ltd.

In addition, Cellnex Telecom will gain concessions to use street infrastructure as locations for telecom sites in 14 London boroughs.

Cellnex Telecom and Arqiva's boards approved the transaction, which is expected to be completed in the second half of 2020, subject to regulatory approvals and other conditions. Arqiva will use the majority of the deal's proceeds to reduce its debt. Cellnex Telecom will fund the deal through a combination of a loan facility and cash reserves. It is planning a €2.5 billion rights issue to support the acquisition.

Following the deal closing, Arqiva will retain its broadcast infrastructure business and its interests in machine-to-machine data services for the utilities sector. Some of Arqiva's employees will also transfer to Cellnex Telecom.

Cellnex Telecom expects the transaction to grow its portfolio to about 53,000 sites across Europe, including forecasted rollouts until 2027 across the U.K., Ireland, Spain, Italy, France, Switzerland and Netherlands. The tower operator recently secured marketing and operating rights to 220 BT-owned U.K. high towers in a 20-year deal worth about £100 million. It is also acquiring Iliad SA's mobile tower operator unit Iliad 7.