US tower company SBA Communications has agreed to acquire 7,000 telecom towers from Millicom International Cellular for $975 million.

The sale-leaseback deal will cover towers in Guatemala, Honduras, Panama, El Salvador, and Nicaragua.

Towers
– Getty Images

Millicom, which operates under the Tigo brand, will lease back space on the sites for 15 years through country-specific Master Lease Agreements (MLAs). These agreements also extend the current leases on 1,500 sites with SBA for 15 years.

SBA noted that the sites are anticipated to produce revenues of around $129m plus $89m of tower cash flow during their first full year of operations after closing.

As part of the agreement, SBA has agreed to enter into a build-to-suit agreement to build up to 2,500 additional sites.

“We are pleased to partner with SBA Communications in this landmark tower transaction, a key element of Millicom’s strategy​ to unlock shareholder value," said Marcelo Benitez, chief executive officer of Millicom.

"By monetizing non-core assets, we are optimizing our operational and capital efficiency, positioning the company for sustainable growth and long-term value creation. This agreement with SBA Communications strengthens our position as the leading mobile network operator in the region."

SBA currently operates more than 39,000 towers across 15 markets including the Americas, Africa, and the Philippines.

Latin-American-focused carrier Millicom has recently been subject to takeover talks from Xavier Niel's Atlas Investissement.

In August, Atlas increased its bid to $4.4 billion after its initial bid of $4.1bn was rejected, with Millicom's board of directors deeming the bid too low. A week later, Millicom again said the offer fell short.