The sale is expected to allow Lumen to speed up investments in key growth areas
Australia's pension fund AustralianSuper is investing alongside Stonepeak in the acquisition. (Credit: LEEROY Agency from Pixabay)
US telecommunications company Lumen Technologies has signed an agreement with Stonepeak to sell its Latin American business for $2.7bn.
The transaction enables Stonepeak to gain an opportunity to invest in a Latin American communications platform, which has an extensive subsea, terrestrial fibre and data centre footprint across the region.
Australia’s pension fund AustralianSuper is investing alongside Stonepeak in the acquisition of the business.
The sale is expected to enable Lumen to gain additional capital to speed up investments in key growth areas and reduce its debt.
Upon completion of the transaction, the divested business will operate as an independent, US-headquartered portfolio company of Stonepeak.
To serve joint customers in the LATAM region, Lumen intends to continue a strategic relationship with the New LATAM Company.
Lumen president and CEO Jeff Storey said: “This transaction unlocks value for our shareholders while allowing us to maintain our global presence through our strategic relationship with the New LATAM Company.
“This transaction allows Lumen to focus investments in key areas of the business to drive future growth while providing flexibility for our capital allocation strategy.”
The relationship between Lumen and the New LATAM Company will include reciprocal reselling and network arrangements that leverage the two companies’ extensive fibre footprints, data centres and other network assets.
After the completion of the deal, the company’s customers within the Latin America region will be served directly by the New LATAM Company or the strategic Lumen partnership.
Lumen will continue serving customers in North America and the Europe, Middle East and Africa (EMEA) and Asia Pacific (APAC) regions.
Recently, the company expanded its fibre network infrastructure in Europe, by adding new fibre routes in France, Switzerland and Spain.
The transaction is expected to be completed in the first half of 2022, subject to receipt of all regulatory approvals in the US and some countries where the New LATAM Company operates.
BofA Securities, Morgan Stanley, Citi, and Goldman Sachs are serving as financial advisors to Lumen on the transaction.