Telecom operator Telstra Corp (ASX: TLS) said it will sell on 49% of its mobile tower business to an Australasian consortium for A$2.8 billion (US$2.1 billion).
The consortium comprises the Future Fund as its largest investor, Sunsuper and the Commonwealth Superannuation Corporation (CSC), and is managed by Morrison & Co.
Half of the sale proceeds from the InfraCo Towers business are to be returned to Telstra’s investors.
Telstra InfraCo Towers owns and operates approximately 8,200 tower assets including over 5,500 mobile towers supporting critical digital infrastructure throughout Australia.
The transaction values the business at AU$5.9 billion, recognising the significant strategic value of the high-quality, well-located assets, with the transaction expected to complete in Q3 2021.
Telstra will retain a 51% holding in the business and has entered into long-term service agreements with InfraCo Towers to secure continued access to services that will support their market leading presence in mobile and data services.
Dr Raphael Arndt, CEO of the Future Fund, said: “This investment further strengthens our exposure to digital infrastructure and the long-term thematic of data growth. We are pleased to partner with Telstra to play an important role in strengthening Australia’s 5G infrastructure.
“The long-term growth potential and defensive cash flow profile of this investment is a valuable fit with our focus on diversification across the portfolio.”
Also commenting, Marko Bogoievski, CEO of Morrison & Co, said that Telstra InfraCo Towers should deliver consistent long-term returns for investors, supported by strong data growth and rising consumer and enterprise demand for mobile capacity and coverage.
“We see future opportunities to develop both greenfield and in-situ assets, including 5G network deployments, to provide efficient and reliable access for all customers,” he added.
Andrew Penn, CEO of Telstra, said: “The increased commercial focus on Towers since its establishment as a standalone business within Telstra is already delivering efficiencies and we look forward to working with Morrison & Co and the consortium partners to sustain its market leadership over the long term, through investment in new infrastructure and services, availability of competitive market offerings and leverage of new technology to improve speed and efficiency.”