Telefónica has reached an agreement with Vauban Infrastructure Partners and Crédit Agricole Assurances (CAA) to sell 45% of Bluevia Fibra, the new company with which it plans to operate and exploit its rural fiber optic network, for €1,021 million. EUR, the operator informed CNMV on Monday.
Bluevia will purchase 3.5 million real estate units (homes and commercial buildings) already passed from Telefónica Spain and will deploy an additional 1.5 million units over the next two years, bringing the total area of 5 million real estate units passed. The 3.5 million real estate units to be acquired by Bluevia represent 13% of Telefónica’s fiber optic network in Spain, which will maintain the rest of the network.
Similarly, as part of the deal, a series of service provision contracts will be signed by Telefónica Group to Bluevia. The consortium formed by Vauban, belonging to the French banking group Natixis, and CAA will acquire 45% of Bluevia from Telefónica Spain for €1,021 million in cash, 100% of Bluevia at €2,500 million, which is an implicit multiplier of 27.1 times on the company’s gross operating profit (Oibda) for the year 2022.
In terms of the capital structure after closing the operation, Telefónica Group will hold 55%, and Vauban and CAA will hold the remaining 45%. Telefónica Group’s participation will be organized by the two subsidiaries Telefónica España and Telefónica Infra with 30% and 25% participation, respectively. The closing of the operation is subject to obtaining the corresponding regulatory licenses.
Bluevia Fibra will be able to take advantage of public funds earmarked for the deployment of telecommunications networks in unprofitable areas, such as rural areas, through the program called Único. The Secretary of State for Communications has put two appeals for help on the table. The first was 250 million and Telefónica got 80% (the rest went to Anatel and Adamo). The second has the same amount of budget and has not yet been resolved.
With this operation, Telefónica continues to make its infrastructure more profitable, by separating assets and selling them to third parties. The formula for granting entry to a financial partner has already been tested in countries such as Germany, with Allianz; Brazil, with Caisse de dépôt et placement du Québec (CDPQ), and in Colombia and Chile, with KKR. Telefónica and its partner Liberty Global are also negotiating the entry of a financial partner for their fiber vehicle in the UK.
However, at the beginning of 2021, the largest sale of American Tower, together with its partners KKR and Pontegadea, to the division of mobile communication towers was in Europe (Spain and Germany) and in Latin America (Brazil, Peru, Chile and Argentina) in the amount of 7,700 million euros.
Financially, the operations help Telefónica reduce its debt, which currently exceeds 27,000 million, although the disadvantage of separating and selling network assets to third parties is that they must pay for rent, which increases future costs. All major European operators, including Vodafone, Deutsche Telekom and Orange, carry out this process.
Telefónica, which will present the results of the first semester on the 28th, has not yet decided whether it will finally acquire British broadband operator TalkTalk, through Virgin Media O2, the British subsidiary 50% owned by the Spanish company and Liberty Global. TalkTalk will have a value close to £3,000 million (about €3,600 million).
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