Spark New Zealand is selling half of its Connect 8 services infrastructure unit to electricity distributor Electra Group, in a deal which will see Connect 8 take full ownership of Electra's telecommunication's contractor Sky Communications.
Auckland-based Spark says bringing together the complementary capabilities of Skycomms and the Connect 8 business will improve operational efficiencies and speed to market and provide a solid foundation for the rollout of future mobile technology – something that is crucial for Spark's wireless strategy.
"This is more than simply a divestment – it is about forging a new partnership of strategic importance for Spark to support our fibre expansion programmes and growth in mobile capacity," Spark chief operating officer Mark Beder said in a statement.
Spark declined to detail the monetary value of the transaction which it said is expected to be completed this month.
Connect 8 was formed in February 2015 as a joint venture between Spark and Vocus Communications to build fibre networks across New Zealand, and Spark later took over the unit in December 2016. Over the past year the business has widened its offering to other utility sectors, and bills itself as New Zealand's premier construction contractor for the "buried infrastructure industry", covering the water, power, gas and telecommunications sectors.
Levin-based Electra owns and operates the electricity lines and assets in the Kapiti and Horowhenua districts. The locally owned business is the country's biggest meter-reading company and the second-largest installer of mobile telephone networks.
Spark shares last traded at $3.575 and have slipped 3.3 percent over the past 12 months.