Vodafone Group Plc has announced it has entered into a strategic co-control partnership with a consortium of long-term infrastructure investors led by Global Infrastructure Partners and KKR for Vodafone’s 81.7% stake in Vantage Towers AG.

 The consortium includes Tower Bridge Infrastructure and PIF.

Vantage Towers is Europe’s largest company when it comes to building and operating mobile phone masts or towers (also known as cell sites). It has 82,000 sites across 10 markets.

Vodafone and the Consortium have created a joint venture (the “JV”) which will hold Vodafone’s 81.7% stake in Vantage Towers. Vodafone will contribute its shares in Vantage Towers into the JV by way of a capital increase against new JV shares. The Consortium will obtain a shareholding in the JV of up to 50% by acquiring JV shares from Vodafone for cash.

In parallel with this announcement, the JV has announced today that it will make a voluntary takeover offer for the outstanding Vantage Towers shares held by minority shareholders pursuant to Section 10 of the German Securities Acquisition and Takeover Act. Completion of the VTO will be conditional on customary conditions, including obtaining regulatory clearances for the partnership between Vodafone and the Consortium. The full terms and conditions of the VTO will be set out in a separate offer document to be approved by the German Federal Financial Supervisory Authority.

Following approval by BaFin, the offer document will be published and the acceptance period for the VTO will commence.

The JV has received support from RRJ Capital in the form of an irrevocable undertaking to accept the VTO. RRJ Capital is Vantage Towers’ second largest minority shareholder and owns 2.4% of its ordinary share capital in issue (or 13% of the total minorities).

Nick Read, Vodafone Group Chief Executive said: “This is a landmark moment for both Vodafone and Vantage Towers. This transaction successfully delivers on Vodafone’s stated aims of retaining co-control over a strategically important asset, deconsolidating Vantage Towers from our balance sheet to ensure we can optimise its capital structure and generate substantial upfront cash proceeds for the Group to support our priority of deleveraging. We are excited to partner with GIP and KKR, both world-class investors who bring significant expertise in digital infrastructure and share our long-term vision for Vantage Towers as we collectively take the business to the next stage of its growth.”

Will Brilliant, Partner and Head of Digital Infrastructure at GIP said: “We’re delighted to join forces with Vodafone and KKR to invest in Vantage Towers, a high-quality European tower portfolio with strong upside potential. We are looking forward to capturing the exciting value-creating opportunities in the European telecoms infrastructure sector by advancing Vantage Towers’ strategy and supporting its capacity to build new sites. As strategic partners with Vodafone and KKR, we will bring our deep infrastructure expertise and resources to help the company deliver the best data connectivity for individuals and businesses and contribute to enabling Europe’s digital future in the interest of all stakeholders.”

Vivek Badrinath, CEO of Vantage Towers, said: “The intended partnership announced today is an important moment for Vantage Towers, highlighting the significant progress we have made since our IPO in March 2021. It also delivers a premium valuation for our shareholders. We are excited by the prospect of welcoming GIP and KKR as new shareholders, both world-class investors who bring significant expertise in digital infrastructure and share our long-term vision for Vantage Towers as we collectively take the business to the next stage of its growth. We look forward to the future and believe that the strategic partnership of Vodafone with GIP and KKR will enable Vantage Towers to further enhance its position as one of the leading tower companies in Europe.