Spanish Telefonica and Zara owner Ortega buy 40% of Telxius from KKR

Adds details and background

MADRID, February 2 (Reuters)Telefonica SA in Spain TEF.MC said he had agreed to buy, together with the owner of his partner Zara, Amancio Ortega, the 40% stake in his Telxius unit which is owned by KKR KKR.N for 216 million euros ($243 million).

Telefonica and Ortega, through its family office Pontegadea, will become the sole shareholders of telecoms infrastructure operator Telxius through their joint venture Pontel, Telefonica said in a filing to the market regulator on Tuesday evening.

Simultaneously, Pontegadea will increase its stake in Pontel to 30% from 9.99%, according to the filing.

Telefonica sold a 40% stake in Telxius to KKR in 2018 for 1.275 billion euros. At the time, Telxius included Telefonica’s mobile phone masts and other assets such as submarine cables.

American Tower Corp AMT.N last year bought most of Telxius’ assets for 7.7 billion euros, leaving it much smaller, with just a few submarine cables.

Separating infrastructure assets into a different unit was part of Telefonica’s strategy to maximize the value of its assets before selling them, as infrastructure assets attracted much higher prices than telecom operator stocks. .

Telefonica sold the assets of Telxius and other units in a bid to reduce debt, as rolling out 5G technology requires heavy investment.

On the other hand, Ortega has invested its proceeds from Zara’s parent company, Inditex ITX.MC in electrical and telecom infrastructure.

Pontegadea recently became the largest private investor in Spanish electricity grid operator Red Electrica REE.MCwith a 5% stake, and also acquired a 49% stake in a wind farm operated by the Spanish energy group Repsol REP.MC.

($1 = 0.8872 euros)

(Reporting by Corina Pons and Inti Landauro; Editing by Edmund Blair)

((Inti.Landauro@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.