American Tower Corp to buy Bharti Airtel’s telecom towers in Nigeria for $1.05B

NASDAQ-listed American Tower Corp has signed a definitive agreement to acquire Indian cellular services provider Bharti Airtel Ltd's over 4,800 communications towers in Nigeria, as per a stock market disclosure.

American Tower Corp said it would pay $1.05 billion for the acquisition.

As per the agreement, Airtel will be the anchor tenant on the portfolio under a lease with a 10-year initial term.

The agreement will help Airtel to focus on its core business and customers, enable it to deleverage through debt reduction and will significantly reduce its on‐going capital expenditures on passive infrastructure in Nigeria, the disclosure said.

The agreement was signed between American Tower Corp and Bharti Airtel’s subsidiary Bharti Airtel International (Netherlands) BV (Airtel).

“This agreement, which is part of our stated philosophy of promoting infrastructure sharing, will provide us with considerable cost efficiencies and at the same time allows us to sharpen our focus on the customer. American Tower has a proven track record in passive infrastructure management and we look forward to benefiting from the best practices from all other countries it operates in,” Christian de Faria, MD and chief executive officer of Bharti Airtel Africa, said.

For Bharti this is the third such deal this year.

In July, it inked a deal to sell tower assets in four countries in Africa to Helios Towers Africa (HTA), a firm owned by a consortium of investors including Africa-focused PE firm Helios Investment Partners and International Finance Corporation (IFC). This deal covered 3,100 towers.

Two months later it signed an agreement for the divestment of over 3,500 telecom towers spread across six African countries to Eaton Towers, an independent telecom tower company in Africa.

The asset sale and leaseback agreements (which allows it to keep using the towers) is part of the overall strategy of the company to sell off its 15,000 towers to independent tower companies in the continent.

With the three deals, it has now offloaded around two-thirds of these telecom towers in Africa.

Bharti Airtel has operations in 20 countries in Africa after snapping the assets of Kuwait’s Zain in the continent for $9 billion in 2010.

For American Tower Corp, which has a global portfolio of about 70,000 communications sites, the latest deal will enable it to launch its operations in Nigeria.

“We are pleased to announce the launch of our operations in Nigeria while expanding our relationship with Airtel, one of the leading multinational operators in the world,” American Tower's chairman, president and chief executive officer said.

“With the largest population and economy in Africa and relatively underdeveloped wireless infrastructure, we view Nigeria as a tremendous growth opportunity. Further, we expect this investment to support our long‐term objective of generating double‐digit AFFO per share growth for our stockholders,” he added.

The acquisition is expected to be completed during the first half of 2015, subject to customary closing conditions and regulatory approvals.

(Edited by Joby Puthuparampil Johnson)

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