Telefónica has sold a 54% stake in its Peruvian network to US-based investment firm KKR and 10% to Entel Peru, retaining a 36% share
In an effort to reduce debt and fund investment to build 5G mobile networks, Telefónica, one of Spanish America’s largest telecommunications firms, has recently made a sequence of asset sales in order to focus on its core businesses in Spain, the UK, Germany, and Brazil. As part of this move, in 2021 The El Salvador unit was sold to General International Telecom for $144 million, followed by Liberty Latin America’s acquisition of the Costa Rican unit.
The value of the deal has not been disclosed, although Telefónica noted that it would cut the company’s debt by €200 million. A close banking source to the deal estimated that, including debt, the transaction valued 100% of the unit at around €550 million.
As part of a wider deal, KKR has also purchased majority interest in PangeaCo and the existing fibre optic networks of Entel Peru, combing their fibre assets with those of Telefónica Peru to build the country’s first nationwide open access wholesale fibre company, ‘ON*NET Fibra de Perú’.
KKR will own a controlling 54% stake in the business, Telefónica Hispanoamérica will own 36%, and Entel Perú will own 10%. Telefónica and Entel will serve as anchor tenants of the new network.
KKR added that they plan to invest an additional $200 million to grow Peru’s digital infrastructure to more than double the size of the existing fibre optic networks, to which currently less than 35% of the population have access, to reach 5.2 million homes passed by the end of 2026.
As always, the transaction will be subject to the typical regulatory approvals.
The creation of ON*NET Fibra de Perú follows the pattern of similar model to that KKR has employed with Telefónica and Entel in other markets in recent years. In 2021, KKR acquired and combined the assets of both operators in Chile and Colombia – creating ON*NET Fibra de Chile and ON*NET Fibra de Colombia, respectively – and has expanded these wholesale networks significantly over the past two years.
Meanwhile, in Europe, KKR is deeply embroiled in the ongoing battle with Cassa Depositi e Prestiti and Macquarie Group over who will be allowed to purchase TIM’s fixed broadband network, which analysts suggest could be worth up to €23 billion.
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