BCE sells stake in cellphone towers to the Caisse for $2.45-billion

BCE Inc. BCE-T is selling a minority stake in its cellphone towers to the Caisse de dépôt et placement du Québec for $2.45-billion, money the country’s largest telecom provider will use to pay down debt and expand its data centre business.

Montreal-based Bell is selling the Caisse a 49.9-per-cent interest in more than 5,000 cellphone sites and will retain ownership of the rest of the subsidiary. The new company, initially called TowerCo as its owners search for a brand name, earns fees by charging Bell and other clients to use its infrastructure.

Bell decided to sell a stake in its towers in order to hit debt reduction targets while investing in growth initiatives such as domestic AI infrastructure and a U.S. fibre optic network, chief executive officer Mirko Bibic said in an interview.

“The partnership unlocks the significant value embedded in our infrastructure,” said Mr. Bibic. He said a number of domestic and foreign institutional investors bid on Bell’s towers during an auction that stretched over several months.

“We are pleased to see the Caisse, an experienced Canadian investor based in Montreal, step up and share our vision,” Mr. Bibic said.

The country’s two other major telecoms, Telus Corp. T-T and Rogers Communications Inc. RCI-B-T, have raised billions of dollars with infrastructure sales. Over the past two decades, most U.S., Asian and European telecoms sold their towers.

Last year, the Caisse acquired a 49-per-cent stake in Telus‘s towers for $1.26-billion. Mr. Bibic said Bell got roughly the same valuation on its towers as Telus, on a network that is twice the size of its rival’s.

The Caisse also owns telecom towers in the U.S., New Zealand and India, where it partnered with Brookfield Asset Management Inc. The asset manager owns $75-billion of infrastructure in its $552-billion portfolio.

At TowerCo, the Caisse will roll out a game plan that has worked in other regions by trying to entice other service providers to hang their gear on what used to be Bell-branded towers, Caisse head of infrastructure and sustainability Emmanuel Jaclot said in an interview.

“Once you’ve built cellphone towers, the cost of adding additional customers to the network is minimal,” Mr. Jaclot said. He said increased competition to supply cellphone and internet services, including inroads from new entrants such as SpaceX, make towers an attractive asset class.

Former Bell executive J. Bruce Furlong will be the CEO of TowerCo, which the Caisse investment values at $4.9-billion. The transaction is subject to regulatory approval and is expected to close in the first quarter of 2027.

The TowerCo deal is part of a strategy to strengthen Bell’s balance sheet that Mr. Bibic announced in the spring of 2025. The CEO cut the common stock dividend by more than 50 per cent and pledged up to $7-billion in asset sales. Since then, Bell has sold its stake in Maple Leaf Sports and Entertainment for $4.7-billion and announced the sale of several other business.

The TowerCo transaction will allow Bell to meet or beat its debt-to-EBITDA target ratio of 3.5 by the end of 2027 while continuing to invest in growth initiatives, Mr. Bibic said. At the end of June, Bell’s net debt leverage was 3.7 and the company had $37.5-billion of debt.

Over the past year, the telecom announced plans to build data centres in Saskatchewan through its Bell AI Fabric subsidiary. In September, the project grew to a potential $1.7-billion commitment as Bell revealed U.S. AI providers CoreWeave and Cerebrascture had signed on to provide the computing power.

Analysts predicted Bell would sell infrastructure to meet its financial goals while expanding its data centre business.

“We believe BCE could monetize a large minority interest in its towers and recycle the proceeds into AI infrastructure,” said analyst Maher Yaghi at Bank of Nova Scotia in a report published last month. He said the telecom could also land a partner in its Bell AI Fabric division.

“We would support either structure if the valuation and governance terms are attractive,” Mr. Yaghi said.

Bell is also building a western U.S. telecom network, Ziply Fiber, in partnership with a pension fund manager, the Public Sector Pension Investment Board. Montreal-based PSP Investments has committed more than US$1.5-billion to the project.

Bell’s advisers on the cell tower sale were Citigroup Global Markets and law firms Blake, Cassels & Graydon LLP, and Paul, Weiss, Rifkind, Wharton & Garrison LLP. The Caisse’s advisers were TD Securities and lawyers at Stikeman Elliott LLP, with financing from National Bank Financial Markets.