Crown Castle has announced an agreement has been reached to sell its fiber assets for a combined $8.5 billion.

The company has agreed to sell its fiber assets to Zayo Group, while EQT Active Core Infrastructure will buy its small cell assets.

US tower operator Crown Castle has been looking to sell its fiber assets for some time, notably revealing in April last year that it had held talks with multiple parties over a sale.

Steven Moskowitz, chief executive officer of Crown Castle, said the sales come following the conclusion of a “strategic review” of the firm’s business. It expects the deal to be completed in the first half of next year.

Digital Bridge-backed Zayo said its $4.5 billion acquisition of the fiber assets will support its AI push.

The firm noted that the deal will see the company add approximately 90,000 route miles of fiber to Zayo’s network and increase its overall reach to more than 70,000 on-net locations.

“We are strategically investing in expanding and enhancing our country’s critical network infrastructure to meet the demands of hyperscalers, data centers, enterprises, and carriers that will facilitate the growing AI economy,” said Steve M. Smith, chief executive officer at Zayo.

“This acquisition strengthens our ability to deliver the reliable, low-latency, high-capacity fiber solutions our customers need to scale in an increasingly data-driven world.”

EQT $4.25bn Small cells deal

Crown Castle’s sale of its small cells to EQT is also valued at $4.25bn.

It operates a nationwide portfolio of approximately 115,000 small cells on air or under contract spread across 43 states, serving the ‘Big 3’ mobile network operators.

“Small cell networks are an essential part of the digital infrastructure ecosystem,” said Alexander Greenbaum, partner and head of EQT’s active core infrastructure advisory team.

“This investment is a natural fit within EQT Active Core Infrastructure’s strategy – investing behind long-term contracted, core infrastructure assets with strong growth potential. With EQT’s deep experience in digital infrastructure and active approach to value creation, we see significant opportunity to support the Company’s continued growth.”

Crown Castle first launched a review of its fiber business in 2023 as part of an agreement with activist investor Elliott Investment Management.

Crown Castle, which owns and operates more than 40,000 telecom towers across the US, wants to sell the assets to expand its tower footprint.

In September, the company hinted that it may look to enter international markets again.

A month later, Crown Castle confirmed it had canceled plans to build around 7,000 small cells, noting it mutually agreed to cancel the builds due to the lengthy permit times and high costs. Moskowitz said the move will help the company save $800 million in future capital spend.

In the company’s announcement, Crown Castle said it expects to use cash proceeds from the sale to repay existing indebtedness and fund anticipated share repurchases, while it will look to initiate a share repurchase program of approximately $3.0 billion.

“Selling our fiber segment represents a significant step on Crown Castle’s path towards a refined focus as a pure-play provider of multi-tenant tower assets,” added Moskowitz.

“As we look ahead, with our expansive and capital efficient portfolio of approximately 40,000 towers across key locations in the US, which we believe is the best wireless market in the world, and greater focus on customer service and operational initiatives, we anticipate that we can generate durable and growing cash flows that will provide attractive returns to our shareholders.”