Deutsche Telekom AG (DTE), Germany’s biggest phone company, agreed to fully take over its Czech phone unit from investors including Mid Europa Partners LLP, according to the private-equity firm.
The owner of the T-Mobile brand will pay 828 million euros ($1.1 billion) for a remaining stake of 39.2 percent from the Falcon Group led by Mid Europa, according to an e-mailed statement from the private-equity owner. The deal is expected to be completed by the end of February, it said.
The buyout is part of Chief Executive Officer Timotheus Hoettges’s strategy to broaden Deutsche Telekom’s reach in eastern Europe. With assets stretching from the U.K. to the Balkans, the carrier agreed to acquire Warsaw-based landline provider GTS Central Europe in November and has offered to purchase an additional 10 percent stake in Hellenic Telecommunications Organization SA (HTO) from the Greek government, people familiar with the talks said last month.
Claudia Nemat, who heads the company’s European operations, is set to travel to the Macedonian capital of Skopje on Feb. 13 to present the company’s progress in developing an integrated network in the region.
Deutsche Telekom has offered mobile services in Germany’s eastern neighbor since 1996, according to its website. The Czech wireless company had 5.5 million customers at the end of 2012 and reported sales of 1.04 billion euros for that year. Spain’s Telefonica SA (TEF) last month completed a 2.5 billion-euro sale of its Czech unit to PPF Group NV.
Europe Focus
Falcon Group is 75 percent controlled by Mid Europa.
“The successful sale of our stake in TMCZ is yet another landmark deal executed by Mid Europa in the Czech Republic, which continues to be one of the core markets for our firm,” Robert Chmelar, associate director of Mid Europa, said in the statement.
Hoettges, who became CEO on Jan. 1, is renewing predecessor Rene Obermann’s push into eastern Europe after the company’s U.S. business returned to growth following its merger with MetroPCS Communications Inc. Excluding the German home market, eastern Europe accounted for 22 percent of Deutsche Telekom’s net revenue in the first nine months of 2013. The company is scheduled to release fourth-quarter earnings March 6.
The carrier plans to eliminate thousands of jobs at its T-Systems corporate-client unit as it trims outsourcing services with low profitability and refocuses on growth areas such as connected cars and cloud computing.
Deutsche Telekom shares have fallen 5.4 percent this year. They closed at 11.76 euros on Feb. 7 in Frankfurt, valuing the company at 52.3 billion euros.
Source: Bloomberg (by )
