Cellnex, Europe's largest towerco, has hit a roadblock in its strategic pivot under new CEO Marco Patuano. The company has halted plans to sell a stake in its Polish business, a move that could have valued the unit at up to €4bn (US$4.4bn), according to sources familiar with the matter reported in Bloomberg.
The potential stake sale has been put on ice after attempts to broker an agreement between two telecom clients to build out a network in Poland stalled. Cellnex had made the divestment contingent on Play agreeing to build a shared active network with rival Polkomtel using Cellnex's infrastructure. Cellnex has had an established active network in Poland since 2021, but after more than a year of negotiations the talks with the two carriers failed to progress.
This setback comes as a blow to CEO Marco Patuano's efforts to rein in costs at the acquisitive telecom equipment company and focus on improving its investment grade rating. Private equity firms including Global Infrastructure Partners, KKR & Co, and Macquarie Group Ltd. were reportedly among the suitors that had considered bidding for the stake.
Cellnex's expansion in Poland began in October 2020 when it acquired a controlling 60% stake in Play's 7,000-site tower portfolio. The company further consolidated its position in June 2023 by purchasing Iliad's 30% stake in the jointly held OnTower Poland towerco for €510 million, reaching full ownership.
In February 2021, Cellnex announced a second deal in Poland, reaching an agreement to acquire network assets from Polkomtel. This deal included 7,000 towers, a build-to-suit pipeline for 1,500 new sites over ten years, and active infrastructure comprising approximately 37,000 radio carriers, 11,300km of fiber backbone, and a nationwide network of microwave radio links.
The Polish unit holds a unique position in Cellnex's portfolio, owning "active infrastructure" that transmits and routes signals, rather than just the "passive" towers and masts that form the bulk of Cellnex's assets. This represents a potential new growth area for the company, which became Europe's biggest tower operator by buying up infrastructure from traditional telecommunications operators. Active sharing is seen as a risk and opportunity for towercos, but operators have shown less willingness to share radio networks than passive telecom tower infrastructure
The halted stake sale would have provided Cellnex with funds to further build up its network in Poland. However, with negotiations at a standstill, the company's plans for expansion and monetisation in the Polish market have been temporarily scaled back.
Cellnex has been exploring other options to de-lever and diversify its product offering, as covered previously in TowerXchange.
In March Cellnex agreed to dispose of its towers in Ireland to Phoenix Tower International, and in August Cellnex announced it had arranged to sell its Austrian portfolio to a consortium of investors. And in recently public statements Cellnex had elaborated on its plans to establish a landco in Europe to own the land under telecom towers across Europe, following moves by others to acquire the valuable land.
As Cellnex navigates this setback, industry observers will be watching closely to see how the company adjusts its strategy and whether it can find alternative ways to unlock value from its assets.
