AT&T forms fiber joint venture with BlackRock's GIP and CPP Investments

AT&T (T) said it will establish a fiber joint venture with BlackRock's Global Infrastructure Partners (GIP) and Canada Pension Plan Investment Board (CPP Investments) to accelerate fiber expansion across U.S. communities. The companies have agreed to form the venture, but it has not yet launched: closing is expected in the first half of 2027, subject to regulatory approvals and customary conditions.

On ownership, AT&T will keep 50% of the venture, while GIP and CPP Investments will collectively own the other 50%. The Globe and Mail, citing the announcement, reported that CPP Investments and GIP will each hold 25%. The venture will combine Forged Fiber 37, the AT&T unit that holds fiber assets acquired from Lumen Technologies, with Gigapower, AT&T's existing wholesale fiber venture with GIP.

The structure matters for AT&T's financials. According to the company's release, AT&T expects to receive proceeds at closing, though the amount and the valuation were not disclosed. AT&T does not expect to consolidate the venture's results and plans to report its share of equity income or loss instead. Reuters described the arrangement as a capital-light path to expand beyond AT&T's traditional service areas into major metro areas across 16 states.

AT&T plans to put the proceeds toward its capital allocation priorities, including reaching a net-debt-to-adjusted-EBITDA ratio of about 2.5x within roughly three years, funding continued investment and returning capital to shareholders. AT&T separately targets more than 60 million fiber locations by the end of 2030.

Investors may want to watch for the regulatory approval timeline, any disclosure of the proceeds amount at or before closing, and how the deconsolidated structure shows up in AT&T's reported earnings once the deal closes.