United Group has announced the sale of its telecommunications towers in Bulgaria, Croatia and Slovenia to Saudi company TAWAL, which is the infrastructure subsidiary of Saudi Telecom Co. The €1.22 billion cash deal includes 4,800 towers in the three countries and is the first for the Arab group in Europe.
TAWAL is the largest telecommunications infrastructure operator in the Middle East and North Africa (the so-called MENA region) and owns more than 16,000 towers in Saudi Arabia. Upon completion of the transaction, the company will create a European entity.
United Group, which owns local telecom Vivacom and Nova TV in Bulgaria, hired Goldman Sachs in the fall to seek a buyer for its mobile infrastructure in order to reduce its liabilities. The telecom group told Kapital that there was a competition between many buyers, but Tawal was the best option.
"We are pleased to have reached this agreement, which will allow us to confidently address global macroeconomic challenges," said United Group CEO Victoria Bocklag in the official statement about the deal.
"Our decision to sell the towers was driven by the attractive valuations of assets in the infrastructure sector, which allow us to divest non-core assets. The proceeds of the sale will be used to reduce liabilities and free up funds for future growth and investment," added United.
Following the news, United Group Eurobonds due 2026 rose 6 euro cents to 85 euro cents.
What is included?
It is not yet clear whether the deal also includes 148 base stations that Vivacom acquired from Bulsatcom last year. The sale was disputed before the Commission for the Protection of Competition (CPC) by the two major telecom competitors - "A1 Bulgaria" and "Yettel Bulgaria".
According to the seller, however, they are included in the deal - "the perimeter of the deal with TAWAL includes all the towers owned by "Vivacom", according to United.
The Saudis announced that the 20-year agreement to provide services to United Group also provides for the building of more than 2,000 new base stations, while at the same time "the agreements with the other co-location operators will be maintained and expanded."
Trends in the telecom sector
In recent years, all three Bulgarian operators have hived off their towers into separate entities. The first was "Yettel Bulgaria", which created CETIN Bulgaria, which is responsible for the operator's mobile infrastructure. Subsequently, the owner of the telecom, the Czech PPF Group, sold a 30% stake in its division CETIN Group to Singaporean state investment fund GIC.
"A1 Bulgaria" created the company "A1 Towers Bulgaria" in 2021, which owns the towers, and "Vivacom" - "United Towers Bulgaria" a year later, apparently with the idea of a future sale of these assets. A1's parent company, Telekom Austria Group, announced some time ago that it will merge its towers into a separate company that plans to list on the Vienna Stock Exchange.
This is also the trend in the entire telecommunications sector. In 2022, Vodafone entered into a joint venture with the funds KKR and Global Infrastructure Partners for its infrastructure business Vantage Towers, which valued it at more than €16 billion. At the beginning of this year, Deutsche Telekom announced that it will sell 51% of its GD Towers division, which includes the telecom towers in Austria and Germany, for over 10 billion euros.
Who is the buyer?
TAWAL is a telecommunications company based in Saudi Arabia that engages in the acquisition and operation of telecommunications infrastructure. It was established as a subsidiary of STC Telecom. Last year, Saudi Arabia's Public Investment Fund (PIF) made a non-binding offer to acquire 51% of Tawal, but the company is still owned by STC. Either way, PIF holds 64% of STC and the company's links are directly with the royal family of Saudi Arabia. Tawal's business is valued at more than $6 billion.
United Group has announced the sale of its telecommunications towers in Bulgaria, Croatia and Slovenia to Saudi company TAWAL, which is the infrastructure subsidiary of Saudi Telecom Co. The €1.22 billion cash deal includes 4,800 towers in the three countries and is the first for the Arab group in Europe.
TAWAL is the largest telecommunications infrastructure operator in the Middle East and North Africa (the so-called MENA region) and owns more than 16,000 towers in Saudi Arabia. Upon completion of the transaction, the company will create a European entity.
