Date: Tuesday 23 Jul 2013
LONDON (ShareCast) - Spanish telecom group Telefonica has confirmed that a 6.6bn-dollar deal has been reached to acquire E-Plus, the German subsidiary owned by Dutch telecom KPN.
Telefonica plans to merge the company with its own German subsidiary Telefonica Deutschland. It would create Europe's second-largest operator based on subscribers and the market leader in Germany with a 40% share in mobile phone users.
The deal, which had already been rumoured, is deemed to be a significant value creator thanks to estimated synergies of up to €5.5bn as a result of shared infrastructure, resources, and services.
Under the terms agreed, there will be a two-phase investment process that will give Telefonica a 65% stake in the new company and KPN a 17.6% stake with the remainder left as free float.
In the first phase, Telefonica Deutschland will acquire 100% of E-Plus for €3.7bn in cash and a 24.9% stake in the combined company. The cash payment will be financed via a rights issue for €3.7bn.
In the second phase, parent company Telefonica will acquire from KPN a 7.3% of the combined company for €1.3bn.
The acquisition will help Telefonica improve its risk profile with a goal to lower net debt below €47bn by the end of the year.
The deal is subject to regulatory approval from the European Union but expected to go through in the first half of 2014.
JP
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Currency | Euro |
Share Price | 3.43 |
Change Today | -0.01 |
% Change | -0.29 % |
52 Week High | 3.47 |
52 Week Low | 3.08 |
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