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Deutsche Telekom ‘in search for €20bn deal’ for tower business

Deutsche Telekom tower.jpg

Deutsche Telekom is aiming for a €20 billion valuation for Deutsche Funkturm, its German tower unit, in a 2022 sale.

The German business newspaper Handelsblatt reported yesterday that the company wants to start the sale process by the end of March.

Tim Höttges, CEO of Deutsche Telekom, said only last month that he was open to a deal. “I'd love to have an industrial partner and I’m willing to deconsolidate,” he told a conference in November. Last week his own contract was renewed for another five years

Handelsblatt said the suggested price – from the paper’s own sources “in financial and corporate circles”, which it has not named – reflected a valuation of 30 times expected Ebitda.

He said in November: “Deconsolidation makes to me total sense.” He said an initial public offering (IPO) in Deutsche Funkturm “doesn’t make sense” because it would leave the group with a minority stake. 

That’s a different strategy from the Netherlands, where earlier in 2021 Deutsche Telekom merged the tower unit used by its T-Mobile operation with that of Cellnex, the expanding Spanish group.

In September 2021 a joint venture of Warburg Pincus and Apax Partners bought T-Mobile Netherlands, which was a joint venture with Tele2, for €5.1 billion.

Handelsblatt said on Sunday that Deutsche Telekom would be open to offers for a minority or majority stake in its German tower business, quoting “various people familiar with the situation”.

Deutsche Funkturm – “Funkturm” means “radio tower” – is 83.33% owned by the Deutsche Telekom group and 16.67% by its German operating subsidiary Telekom Deutschland.

The plan when the unit was set up in 2002 was to sell within five years, but in 2007 Deutsche Telekom announced it was no longer for sale. It started to look at selling a 49% share in the unit in 2017, but again that came to nothing. 

Among Deutsche Funkturm’s properties are the Berlin TV tower, the Fernsehturm, built in Communist days in East Berlin. 

 

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