As Wireless Watch went to press, reports were emerging that Spain-based tower operator Cellnex was considering a potential takeover bid from American Tower and asset manager Brookfield. This comes after Cellnex’s CEO, Tobias Martinez, announced earlier this month that he would stand down, as the towerco radically changed its growth strategy from one of rapid acquisition, to one of organic expansion.
Cellnex’s share price has leapt by 12% to €36.35 (on Tuesday morning), since the rumors emerged on Friday. The reports surfaced in the Reuters news agency, quoting Spanish online newspaper OK Diario. Unidentified sources said Goldman Sachs was advising Cellnex, while Morgan Stanley was advising American Tower and Brookfield.
M&A activity among large tower operators has been intense in recent years, much of it driven by Cellnex’s aggressive expansion to become Europe’s largest towerco. The reshaping of the neutral host sector has also been accelerated by the trend for operators to carve out or sell off their tower operations to unlock cash and efficiencies; and by the expansion of some towercos beyond macro cell sites into fiber xHaul, edge data centers and small cell infrastructure.
Although Cellnex has been at the heart of these trends, it recently announced an abrupt change of strategy to focus on organic growth and the expansion into new sectors such as private networks, and to end its pursuit of large acquisitions. Recent deals, such as its purchase of CK Hutchison’s UK tower portfolio, had come under strict regulatory scrutiny from antitrust watchdogs, and Cellnex had backed away from bidding for Deutsche Telekom’s tower unit, leaving Germany as the biggest European market in which Cellnex does not have a footprint.
Cellnex has more than 103,000 towers and a market capitalization of €25.6bn. American Tower has also been investing significantly in European assets to broaden its portfolio in the region – and so a bid for Cellnex would attract deep antitrust scrutiny – and Vodafone carve-out Vantage Towers is also a major regional player.