Iliad forms cunning plan to sell Polish towers to Cellnex

Just over a month after revealing its intention to acquire Play in Poland, France-based Iliad has already put together a plan that will inject €804 million (US$950 million) into its newest mobile business.

Iliad, which is owned by French billionaire Xavier Niel, agreed to a deal with Cellnex that will see the Spanish tower company buy 60% of the business that will manage Play's mobile passive infrastructure, covering some 7,000 sites. Play would then retain the remaining 40% stake.

The agreement will be transferred to Play when Iliad acquires control of the Polish operator. Iliad said the proceeds of the sale will fund the rollout of Play's fixed network in Poland and accelerate the rollouts of its 4G and 5G network.

I did what I had to do: Xavier Niel's reach extends beyond tech and telecoms - he's a co-owner of Le Monde and shares rights ownership of the song 'My Way.'  (Source: Le Web on Flickr CC2.0)
I did what I had to do: Xavier Niel's reach extends beyond tech and telecoms – he's a co-owner of Le Monde and shares rights ownership of the song "My Way."
(Source: Le Web on Flickr CC2.0)

Admittedly, Play was already said to be working on a strategic review of its around 8,000 sites, around half of which are towers, according to reports in June.

The mobile operator was aiming to follow the example of other European operators by establishing a separate TowerCo that could then be spun off.

Iliad is expected to complete the acquisition of Play by the end of November. The agreement between Iliad and Cellnex is expected to be closed by Q2 2021.

Cellnex said the new Polish tower company could then invest up to €1.3 billion (US$1.53 billion) over the next 10 years in rolling out up to 5,000 new sites.

Iliad indicated that it would undertake to build at least 1,500 of those sites in partnership with Cellnex, representing about €400 million ($423 million) over the next 10 years.

Towering growth

The agreement between Cellnex and Iliad extends an existing relationship between the two groups.

In May 2019, the two companies agreed that Cellnex would acquire 10,700 Iliad sites in France (Free), Italy (Iliad) and Switzerland (Salt), and roll out a "built to suit" program of up to 4,000 new sites.

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At the same time, Cellnex struck a €1.4 billion ($1.65 billion) deal to create a new company to own and manage Iliad's 5,700 mobile sites in France, with an agreement to build out up to 2,500 additional sites across the country. Cellnex owns a 70% stake in that new company, with Iliad retaining a 30% stake.

Cellnex also acquired Iliad's 2,200 sites in Italy outright for €600 million ($709 million), with a promise to build up to 1,000 more.

At the same time, it struck a €700 million ($827 million) deal to take a 90% stake in the company that runs 2,800 sites in Switzerland for mobile operator Salt, and agreed to build up to 500 more sites across the mountainous country.

The move to add more assets in Poland continues an M&A-fueled expansion drive that has seen Cellnex become Europe's hottest mobile infrastructure neutral host.

It operates a portfolio of about 61,000 sites (including forecast rollouts up to 2027) in Spain, Italy, the Netherlands, France, Switzerland, the UK, Ireland and Portugal.

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— Anne Morris, contributing editor, special to Light Reading

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