| Item 1.01 | Entry into a Material Definitive Agreement. |
Securities Purchase Agreements
On January 13, 2021, American Tower Corporation (the “Company”), through its wholly-owned subsidiary, American Tower International, Inc. (the “Purchaser”), entered into two agreements (the “Securities Purchase Agreements”) with Telxius Telecom, S.A., a subsidiary of Telefónica, S.A., (the “Seller”) to acquire the Seller’s European tower division and Latin American tower division through the purchase of 100% of the outstanding shares of five companies owned, directly or indirectly, by the Seller (the “Telxius Companies”).
The Telxius Companies are engaged in the construction, holding, management and operation of approximately 31,000 communications sites, including towers, distributed antenna systems and small cells, in Argentina, Brazil, Chile, Germany, Peru and Spain. The total consideration for the transactions, including the Purchaser’s assumption of the Seller’s future committed acquisitions, is approximately €7.7 billion (approximately $9.4 billion at current foreign exchange rates), subject to certain closing adjustments (the “Transactions”).
The Securities Purchase Agreements contain customary representations, warranties and covenants of the parties. Consummation of the Transactions is subject to customary closing conditions, including government and regulatory approval, and is expected to close in tranches, beginning in the second quarter of 2021. The Securities Purchase Agreements contain customary termination provisions and, in addition, may be terminated by the Seller if certain closing conditions have not been satisfied or waived prior to the second quarter of 2022 (subject to certain regulatory considerations in Latin America) for any reason not attributable to the Seller.
Commitment Letter
In connection with entering into the Securities Purchase Agreements, the Company entered into a commitment letter (the “Commitment Letter”), dated January 13, 2021, with Bank of America, N.A. and BofA Securities, Inc. (collectively, the “Commitment Parties”), pursuant to which the Commitment Parties have committed to provide up to €7.5 billion (approximately $9.1 billion at current foreign exchange rates) in bridge loans (the “Bridge Loan Commitment”) to ensure financing for the Transactions.
The Commitment Letter contains, and the credit agreement in respect of the Bridge Loan Commitment, if any, will contain, certain customary conditions to funding, including, without limitation, (i) the execution and delivery of definitive financing agreements for the Bridge Loan Commitment and (ii) other customary closing conditions set forth in the Commitment Letter. The Company will pay certain customary commitment fees and, in the event it makes any borrowings in connection with the Bridge Loan Commitment, funding and other fees.
The foregoing descriptions of the Securities Purchase Agreements and Commitment Letter do not purport to be complete and are qualified in their entirety by reference to the terms and provisions of such agreements, copies of which will be filed as exhibits to the Company’s Form 10-K for the year ended December 31, 2020.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
To the extent required by Item 2.03 of Form 8-K, the information set forth in Item 1.01 above is incorporated into this Item 2.03 disclosure by reference.
