Telefonica said it has reached an agreement with Allianz to create a joint venture for building a FTTH network in Germany. The new company plans to invest up to EUR 5 billion over a period of six years to deploy fibre for more than 2 million households in rural and semi-rural areas. The joint venture will lay over 50,000 km of fibre network.
The capital invested is made up of shareholders' equity and a long term subordinated loan, plus non-recourse external financing. Telefonica will invest up to EUR 500 million in equity and Allianz will invest up to EUR 1.0 billion through different instruments.
Telefonica and Allianz will each hold a 50 percent stake in the joint venture. Telefonica will participate in the JV through its infrastructure unit Telefonica Infra, which will hold 40 percent stake, while 10 percent will be in the hands of the subsidiary Telefonica Germany. Allianz Capital Partners will invest 50 percent in the JV on behalf of Allianz and the Allianz European Infrastructure Fund.
The new company will operate as a neutral wholesale company, also providing FTTH wholesale access to telecommunications service providers. Telefonica Spain will contribute its expertise in network design and operations. Telefonica Germany will support the operation of the venture through its distribution networks of online and offline channels and will provide transport infrastructure.
The transaction is subject to the approval of merger control authorities and closing is expected in the first half of 2021.
