CK Hutchison and EQT scrap Wind Tre network infra deal


The €3.4 billion deal has been complicated by 5G-related third-party agreements with Wind Tre’s rivals

In May last year, CK Hutchison announced it was carving out the fixed and mobile assets of its Italian operator Wind Tre, aiming to sell 60% of the newly formed company to Swedish infrastructure fund EQT.

The deal, valuing the business at €3.4 billion, was seen as the latest step of Wind Tre’s ‘asset light’ strategy, at a time when the highly competitive Italian market was leading to slim returns for the entire industry.

Now, however, the sale has been cancelled, with EQT issuing only a brief statement by way of explanation.

“EQT Infrastructure and CK Hutchison, Wind Tre’s current owner, have decided to terminate the transaction owing to conditions precedent to closing not being satisfied by an agreed longstop date of 12 February 2024,” read and EQT press release.

While no specifics have been given for the deal’s failure, the result should not come as a huge surprise to those following proceedings closely.

By November last year, it was already becoming apparent that completing the sale would be a troublesome process, with issues surfacing related to existing network sharing agreements with Wind Tre’s rivals, Iliad and Fastweb.

Iliad and Wind Tre partnered for a 50:50 joint venture (JV) at the start of last year, creating a new 5G wholesaler focussed on providing 5G coverage for rural parts of the country. According to sources, this deal included clauses triggered by a change of ownership, leading to an impasse between the two parent companies.

Wind Tre also has a 5G network sharing agreement with Fastweb that would be impacted by the deal, though it appeared at the time that this situation would be resolved quickly.

Ongoing negotiations to resolve these issues saw the deal between CK Hutchison and EQT repeatedly delayed, with a final deadline of February to close the deal ultimately agreed.

Now, with that deadline having come and gone, both companies have seemingly thrown in the towel – at least for now.

In EQT’s statement, the fund noted that it would continue to look for new deals in this area, without precluding taking a new approach to a deal for Wind Tre’s infrastructure spin-off.

“EQT Infrastructure will continue to explore alternative infrastructure transactions, including with CK Hutchison should the appropriate opportunity arise,” said the company.

In related news, Wind Tre itself is having a busy month, having agreed to acquire Italian fixed wireless access specialist OpNet a week ago for €485 million. The purchase will see OpNet’s more than 3,000 base stations integrated with Wind Tre’s existing infrastructure, as well as bolstering the operator’s 3.5 GHz spectrum holdings.

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