British telecom Vodafone Group announced Monday the European Commission (EU) approved the merger of its Italian tower assets with Infrastructure Wireless Italia’s (INWIT) passive network infrastructure arm, Telecom Italia (TIM).
Approved with 99.9 percent of the votes by INWIT minority shareholders in favor, the merger is expected to be finalized by the end of March and will emerge as Europe’s second largest listed tower company with over 22,000 towers.
In a strategic move designed to roll out their respective 5G networks, Vodafone and TIM have offered commitments to support access to INWIT’s passive infrastructure by all market participants and will allow third-party co-location on 4,000 of its towers in urban areas while maintaining current tenancies.
TIM released a statement saying the EU was in support of Vodafone and TIM sharing active network equipment outside of major cities since the combination would allow for faster 5G deployment over a broader geographic area, at a lower cost, and with less environmental impact. According to the agreement, the active sharing partnership “will exclude municipalities with populations of over 100,000 inhabitants, as well as their more densely populated suburbs.”
Vodafone is expected to receive $2.4 million dollars in proceeds, with both Vodafone and TIM holding a 37.5 percent shareholding in INWIT. In return, INWIT will pay $0.67 special dividend to holders of the company’s post-merger ordinary shares. Assuming the merger completes by the May 19 record date, the ordinary dividend for 2019 (to be approved by INWIT’s shareholders on April 6 of this year) will be $0.15 per share.