Deutsche Telekom Buys Remaining Stake In T-Mobile Czech

Deutsche Telekom Buys Remaining Stake In T-Mobile Czech
By Deutsche Telekom AG [Public domain], via Wikimedia Commons

Deutsche Telekom AG (OTCMKTS:DTEGY) (FRA:DTE) (ETR:DTE) is set to acquire the remaining 39.2% stake in its T-Mobile US Inc (NYSE:TMUS) Czech Republic unit for about €800 million ($1.09 billion).

According to Claudia Nemat, board member for Europe and technology at Telekom, the Czech Republic is an important market for Deutsche Telekom AG (OTCMKTS:DTEGY) (FRA:DTE) (ETR:DTE) due to its size and structure.

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Presence since 1996

The carrier has offered mobile services in Germany’s eastern neighbor since 1996. The Czech company had 5.7 million wireless customers and 119,000 landline connections at the end of the third quarter, and revenue fell 16% to 229 million euros during the period.

Claudia Nemat said in a statement, “The purchase of the remaining shares is a logical step to optimize our portfolio and helps our development into the leading pan-European telecommunications provider”.

Deutsche Telekom will acquire the remaining 39.2% stake in the Czech unit from Falcon Group led by Mid Europa Partners LLP, according to a statement from the private-equity firm. The transaction won’t require regulatory approval, Bonn-based Deutsche Telekom AG (OTCMKTS:DTEGY) (FRA:DTE) (ETR:DTE) said in a separate release.

Simplified capital and governance structure

In a statement issued today, Deutsche Telekom said: “The acquisition of the remaining shares enables a simplification of the capital and governance structure of T-Mobile Czech Republic. In addition, the transaction provides financial benefits, such as the savings of annual dividend payments to the minority shareholders and an increase in net profit”.

The statement further added that the ongoing integration of T-Systems Czech Republic and the planned combination with the Czech operations of GTS Group, T-Mobile Czech Republic is on a clear strategic path to enhance its fixed-line capabilities and foster its marketing position in B2B.

Deutsche Telekom AG (OTCMKTS:DTEGY) (FRA:DTE) (ETR:DTE)’s statement clarified that since T-Mobile Czech Republic is already fully consolidated by Deutsche Telekom, the transaction will have no impact on the Group revenue and EBITDA. Moreover, the transaction is not subject to regulatory approvals.

With assets stretching from the U.K. to the Balkans, Deutsche Telekom agreed to acquire Warsaw-based landline provider GTS Central Europe in November and has offered to purchase an additional 10% stake in Hellenic Telecom Organization S.A. (ADR) (OTCMKTS:HLTOY) from the Greek government. The proposed acquisition broadly aligns with chief executive officer Timotheus Hoettges’s strategy to broaden Deutsche Telekom AG (OTCMKTS:DTEGY) (FRA:DTE) (ETR:DTE)’s reach in eastern Europe.

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Mani is a Senior Financial Consultant. He has worked in Senior Management role in large banking, financial and information technology organizations. He has provided solutions for major banking and securities firms across the globe in the area of retail, corporate and investment banking. He holds MBA (Finance) and Professional Management Accounting Qualifications. His hobbies are tracking global financial developments and watching sports
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