Vodafone sells a stake in Vantage Towers to GIP and KKR

Vodafone Group sold a portion of its ownership of Vantage Towers to investment companies KKR and Global Infrastructure Partners (GIP) and formed a joint venture. The operator will receive at least $3.21 billion from the deal, based on equity from GIP and KKR.

The new joint venture will be a 50/50 partnership between Vodafone and a consortium consisting of KKR and GIP and Vodafone’s 81.7% stake in Vantage will become part of the venture.

The deal values Vantage Towers at $16.3 billion and Vodafone said that RRJ Capital, the second largest minority shareholder with a 2.4% stake in the venture, supports the offer. The transaction is subject to regulatory approval and is expected to close in the first half of 2023.  

The deal is expected to attract further investment in Vantage resulting in up to $7.1 billion in proceeds for Vodafone, depending upon the level of interest from Vantage’s minority shareholders and depending upon whether GIP and KKR can raise more money to increase their stake in the joint venture.

After the transaction closes, Vodafone and the consortium may consider removing Vantage Towers’ public listing from the Frankfurt Stock Exchange.

However, should the consortium own less than 50% of Vantage on June 30, 2023, Vodafone will have the right to sell joint venture shares to third party investors to reduce its stake to 50%.

Vodafone said that by creating the new joint venture, Vantage will be able to grow its co-location business and also pursue new business opportunities from small cells, distributed antenna systems (DAS) and edge computing.

The creation of this joint venture comes little more than year after Vodafone filed an initial public offering for Vantage Towers in March 2021. Earlier this year Vodafone CEO Nick Read said the company would considering selling a stake in the business.

Vodafone Group spun off its tower business in 2019  creating a separate business to manage and maintain its portfolio of more than 61,000 towers. That business later became Vantage Towers. Today Vantage Towers has around 83,000 sites in ten countries. 

This latest move by Vodafone comes after months of activity in the European tower business. American Tower purchased Telefónica’s tower business, Telxius Towers, for about $9.4 billion in 2021 and last July Deutsche Telekom sold a 51% stake in GD Towers, its German and Austrian tower portfolio, to a consortium consisting of Brookfield Infrastructure Partners and DigitalBridge Group.