American Tower Corporation (AMT) and Dutch pension fund manager PGGM have announced entry into a definitive agreement to form a joint venture (ATC Europe), which will focus on pursuing telecommunications real estate investment opportunities in select countries in Europe.

At closing, AMT will contribute its German assets into ATC Europe and PGGM will acquire a 49% interest in ATC Europe. American Tower will retain operational control and day-to-day oversight of ATC Europe.

Bank of America Merrill Lynch is acting as financial advisor to American Tower.

The transaction is subject to customary closing conditions and is expected to close before the end of 2016.

James D. Taiclet, Jr., American Tower’s Chairman, President and Chief Executive Officer, said:

“We are pleased to be able to enter into this partnership with PGGM. We believe that the combination of PGGM’s long-term investment philosophy and extensive knowledge of the European landscape with American Tower’s proven track record of investing in and operating telecommunications real estate assets will establish a compelling platform for future investment opportunities. Further, the transaction supports our objective to continue to drive double digit total shareholder return by selectively pursuing growth across Europe, while at the same time reinvesting the proceeds from this transaction into higher growth assets around the world by utilizing our disciplined capital allocation process.”

Commenting on the transaction, PGGM’s Chief Investment Officer Private Markets, Frank Roeters van Lennep said:

“We are proud to partner with American Tower. Telecommunication real estate assets provide an essential infrastructure to support the mobile communication ecosystem. As a long-term investor in the infrastructure asset class, we are keen on investing in the European real economy, targeting stable long-term returns for the participants of the pension funds for whom we invest. The joint venture with American Tower provides PGGM with a unique opportunity to join forces with a global market leader in the sector and to benefit from their extensive experience.”