By Mauro Orru

--Cellnex to buy CK Hutchison's European tower businesses and assets for about EUR10 billion

--The deal includes acquisition of around 24,600 telecom sites in Austria, Denmark, Ireland, Italy, the U.K. and Sweden

--The acquisition is expected to close on a staggered and per country basis over the next 18 months

Cellnex Telecom SA said Thursday that it has reached an agreement with Hong Kong-listed conglomerate CK Hutchison Holdings Ltd. to buy its European tower businesses and assets for an initial investment of about 10 billion euros ($11.78 billion).

The Spanish wireless-telecommunications company said it would pay about EUR8.6 billion in cash and the remaining balance in new Cellnex shares, with Hutchison expected to own around 5% of Cellnex's enlarged share capital.

The agreement with CK Hutchison, one of the two major Hong Kong-listed flagships of billionaire Li Ka-shing, comes less than a year after Cellnex's GBP2 billion takeover of Arqiva Ltd.'s telecommunications division received regulatory approval in the U.K.

The latest deal includes the acquisition of around 24,600 telecom sites in Austria, Denmark, Ireland, Italy, the U.K. and Sweden, meaning Cellnex is entering the Austrian, Swedish and Danish markets while cementing its foothold in Italy, the U.K. and Ireland.

The acquisition, structured as six separate transactions to reflect the number of countries involved, is expected to close on a staggered and per country basis over the next 18 months. The first transactions are expected to close by the end of December 2020, CK Hutchison said.

It will expand Cellnex's operations to a total of twelve European countries, with about 103,000 towers and telecommunications sites.

"We expect further towers deals to follow as mobile network operators and other owners seek to capitalize on the significant valuations currently placed on telecoms infrastructure and investors look for opportunities to pursue long-term returns and growth, with demand for masts expected to surge due to 5G," said Rob Cleaver, the lead partner at law firm Linklaters advising CK Hutchison on the deal.

Cellnex also agreed to a capital expenditure program to deploy around 5,250 new sites by 2030 along with other initiatives for up to EUR1.4 billion.

The two companies will sign long-term service contracts in the various countries for an initial period of 15 years, which could be extended for another 15 years.

The deal should bring in annual adjusted earnings before interest, taxes, depreciation, and amortization of about EUR970 million and a recurring levered free cash flow of about EUR620 million, Cellnex said.

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

Corrections & Amplifications

This item was corrected at 11:38 a.m. ET. An earlier verison missttated CK Hutchison as CK Hutchinson in one instance.

(END) Dow Jones Newswires

11-12-20 1017ET