Munich – Telefónica Deutschland has sold its passive infrastructure comprising around 10,000 rooftop sites and up to 80 tower sites to Telxius Telecom S.A. for a purchase price of EUR 1.5 billion. Several private equity investors are shareholders in Telxius Telecom S.A., in addition to Telefónica S.A.
The active radio technology at the transferred sites remains the property of Telefónica Deutschland. The equipment is unaffected by the transaction, as Telefónica Deutschland is simultaneously leasing back the necessary installation space at the sites under long-term lease agreements. During a transitional period, Telefónica Deutschland will provide certain services for the divested passive infrastructure. Telefónica Deutschland will also continue to provide maintenance services.
As part of the transaction, Telxius has agreed to develop a total of 2,400 additional sites for installation of active radio technology over the next five years and lease them to Telefónica Deutschland.
The transaction is currently awaiting approval from the relevant authorities and is expected to be completed in two phases in the third quarter of 2020 and 2021. The exact purchase price will depend on the final number of transferred sites.
The deal is one of the first high-value transactions in Germany with related parties within the meaning of section 111a of the Stock Corporation Act (Aktiengesetz – AktG). Transactions of this type by listed companies have been subject to stricter requirements since 1 January 2020, which were incorporated into the Stock Corporation Act through the Act Implementing the Second Shareholder Rights Directive (ARUG II).
A CMS team headed by lead partners Dr Oliver Thurn and Dr Martin Kuhn advised Telefónica Deutschland on all legal aspects of the transaction. State-of-the-art legal tech tools featuring artificial intelligence were deployed to help with extensive due diligence ahead of the transaction and during the carve-out. The team also drew on the firm’s in-house Smart Operations unit.
At Kümmerlein, a team led by partner Dr Joachim Gores advised on the long-term leases as well as the interim service agreement and maintenance contract.
Telefónica Deutschland is a longstanding CMS client and relies on the firm’s expertise on a regular basis. Kümmerlein previously advised Telefónica Deutschland and the former E-Plus on several transactions of this nature, including the transfer of mobile communications sites to Deutsche Telekom and American Tower Corporation. This transaction is the second time CMS and Kümmerlein have worked together to support Telefónica Deutschland – in 2016, they advised Telefónica Deutschland on the sale of 2,350 mobile phone masts to Telxius.
Dr Oliver Thurn, Partner
Dr Martin Kuhn, Partner, both Lead
Anna-Lena Lill, Counsel
Karel Eldred, Senior Associate
Lukas Stegemann, Associate, all Corporate/M&A
Dr Nina Hartmann, Partner, Employment
Kai Neuhaus, Partner
Dr Björn Herbers, Partner
Moritz Pottek, Associate, all Competition & EU
Dr Stefan Höß, Partner
Dr Hubert Schmid, Senior Associate, both Real Estate & Public
Marc Seibold, Partner, Banking & Finance
Dr Frederik Leenen, Counsel, Head of Legal Tech
Stefanie Schramm, Senior Legal Tech Manager
Kümmerlein, Simon & Partner Rechtsanwälte mbB
Dr Joachim Gores, Partner, Lead
Dr Maximilian Ziegler, both Corporate/M&A