Our team advised on a landmark telco deal which sees the sale of 2degrees’ cellphone towers to independent mobile tower company, Connexa for $1.076 billion. The deal merges the tower networks of 2degrees and Spark under the Connexa brand.

The large transaction involves the separation and subsequent sale of 2degrees’ cellphone tower assets from its nationwide mobile network. It was co-led by commercial partners Michael Pollard and Simon Vannini, with assistance from Partners James Craig and Andrew Harkness, Special Counsel Rob Macredie, Senior Associates Catherine Shipton, Nick Bland and Zelda Gower, Senior Solicitor Elsie Stone and Solicitors Dania Alsagoff and Thomas Rowland.

The emergence of “TowerCos”, like Connexa, is part of a global trend in telecommunications infrastructure management. Separation of the tower networks from mobile network operators has created an attractive asset class for well capitalised infrastructure investors. This unlocks value for the mobile network operators and facilitates the financing of the roll-out of high speed 5G technology to cater for the change in consumer demand for greater bandwidth.

Mr Pollard said: “Complex transactions like this one sit in the sweet spot of our commercial M&A expertise, and pull in our relevant subject matter experts from across the firm. The outcome of a deal like this is designed to deliver improved network speed and bandwidth to customers around Aotearoa, and create efficiencies in terms of asset sharing between telecommunications participants”.

The tower sale is the third major transaction in two years that we’ve led in the telco M&A space, including:

• Advising Macquarie Asset Management on the New Zealand aspects of its joint venture with Real Assets and Aware Super and subsequent acquisition of Vocus Group for $3.5 billion.
• Advising Voyage Digital on the $1.7 billion acquisition of 2degrees.

The transaction is subject to approval from the Overseas Investment Office and the Commerce Commission.