Telefónica has sold 40 per cent of its Telxius towers and cables business to KKR, in a €1.275bn deal that will go at least some way towards easing the Spanish group’s debt worries.

Telxius is Telefónica’s infrastructure arm, with a portfolio that includes 16,000 telecommunications towers in five countries and 65,000km of submarine fibre optic cables. The Madrid-based operator tried to float the unit on the stock market last year, but had to pull the offering at the last minute due to lackluster demand from investors.

It was the latest in a series of disappointments for Telefónica – most notably the decision by regulators last year to block the sale of its O2 unit in the UK – that were aimed at reducing its €50bn debt pile. In October, the group announced it was cutting its dividend.

The deal with KKR implies an enterprise value for Telxius of €3.678bn and an equity value of €3.188bn. Telefónica said the deal “confirms the valuation established for Telxius at the time of the preparations for its initial public offering”.

Telefónica said it would remain the “anchor client” for Telxius’s tower and cable business. It will keep operational control of the business and consolidate it into its accounts.

Guillermo Ansaldo, chairman of Telxius said: “Our vision for Telxius is to capitalize on the exponential increase in data traffic forecast for the coming years by offering a first-class network in Europe and the Americas.”

The agreement includes the initial acquisition by KKR of 62m of shares, or 24.8 per cent of the total, for €790m, as well as the option to acquire and sell an additional 38m for at least €485m.

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