Crown Castle International, owner and operator of shared wireless communications and broadcast infrastructure, is to sell its UK subsidiary to National Grid Transco (NGT) for $2.035 billion.
NGT will merge Crown Castle UK with Gridcom, its wholly owned subsidiary, creating a combined business that will provide infrastructure to mobile telecommunications operators in the UK.
“The sale of our UK subsidiary is expected to provide us with significant financial and operational flexibility to pursue opportunities in the larger and faster growing US market,” said John P. Kelly, CEO of Crown Castle.
“While our UK operations have been a solid contributor to our business, we believe there is substantially greater growth potential for our US business given the lower penetration of wireless services and the earlier stage of 3G deployments in the US market,” added Kelly. “This transaction also substantially improves our balance sheet, which we believe will provide flexibility to capitalise on this growth.”
Crown Castle will use approximately $1.3 billion of the proceeds from the transaction to repay Crown Castle Operating Company’s credit facility. Crown Castle expects to use the remaining net proceeds of approximately $740 million to invest in new business opportunities in the US or to repay debt.