Linklaters has advised CK Hutchison on the carve-out of Wind Tre’s mobile and fixed telecoms network into a joint venture, the investment by EQT of a 60% stake in the joint venture, and the entry into a long-term services agreement between the joint venture and Wind Tre’s retained retail telecoms business. The deal values the joint venture at EUR 3.4bn (enterprise value).
As part of the carve-out, Wind Tre, a leading Italian telecoms operator, transferred its active telecoms equipment (radio antennas, base stations etc.) and its wholesale mobile and fixed telecoms business into the joint venture, along with c.2000 employees (who will transfer in two waves and will include Wind Tre’s current CEO) and shareholder debt. The shareholder debt will be repaid on closing by way of a third-party facility arrangement which will be drawn down at that time. Following completion of the transaction, Wind Tre will become the joint venture’s anchor tenant and, under the long-term services agreement referred to above, the joint venture will provide wholesale fixed and mobile services to Wind Tre, allowing Wind Tre to continue providing retail services to its millions of customers across Italy.
The transaction is conditional on regulatory approval in the EU and China, and is expected to complete within six to nine months.
Commenting on the deal, Robert Cleaver said:
This was an important transaction for CKH as it furthers the group’s ‘asset light’ strategy whereby it seeks to recoup the cost of its network investments, improve operational efficiencies and unlock value. We are delighted to advise CKH on a number of recent transactions including this and the sale of its European Telecommunications towers assets to Cellnex.
The cross-practice and global Linklaters team was led by corporate partner Robert Cleaver, TMT/IP partner Rich Jones, corporate managing associate Avi Cohen (all London), alongside corporate partner Pietro Belloni (Milan), corporate partner Christopher Yip (Hong Kong) energy & infrastructure counsel Subir Rajadhyaksha and managing associate Nicholas Howarth, corporate managing associate Richard Ness and TMT/IP managing associate Ashleigh Sinclair and associate Danny Greenland (all London).
This transaction represents the latest in a series of telecoms infrastructure deals on which Linklaters has advised. Recent deals include advising the lenders on the €18.6bn merger between MásMóvil Group and Orange Spain, advising OXG Glasfaser and its shareholders, Vodafone and Altice on the up to €4.6bn financing of an optical fibre network roll-out in Germany, advising Vodafone on strategic partnership with GIP and KKR for Vantage Towers, etc.