UK-based Vodafone Group has announced a strategic co-control partnership with ‘long-term investors with significant expertise in digital infrastructure’, as it looks to accelerate growth at tower unit Vantage Towers. In a press release regarding the matter, Vodafone announced that a new joint venture (JV) has been created with a consortium led by Global Infrastructure Partners (GIP) and KKR, with that JV to hold Vodafone Group’s 81.7% stake in Vantage Towers. As per the transaction plans, Vodafone will contribute its shares in Vantage Towers into the JV by way of a capital increase against new JV shares. Meanwhile, the consortium will obtain a shareholding in the JV of up to 50% by acquiring JV shares from Vodafone for cash. In parallel, the JV 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.
Vodafone Group has said it expects minimum net cash proceeds of EUR3.2 billion (USD3.2 billion) from the deal, ‘based on equity from GIP and KKR that is fully committed at signing and maximum minority take up in the voluntary takeover offer. Maximum net cash proceeds of between EUR5.8 billion and EUR7.1 billion could be realised, however, depending on the take up in the voluntary takeover offer and subject to GIP and KKR raising further equity before closing to increase their stake in the JV to 50%.
With the transaction conditional on regulatory clearances, it is expected to close in the first half of 2023. As a result of the deal, Vodafone has confirmed it will de-consolidate Vantage Towers and equity account for its interest in the JV, claiming such a move will allow the tower company to optimise its capital structure and help drive its pursuit of growth opportunities.