Deutsche Telekom buys rest of Czech unit, as Vodafone said to make Ono move

European mergers and acquisitions moved into overdrive on Monday as Deutsche Telekom confirmed it has agreed to buy the rest of its Czech unit for €0.8 billion ($1.1 billion), and reports said Vodafone has contacted Ono's owners about a possible acquisition of the Spanish cable company.

Deutsche Telekom said it has agreed to fully take over its Czech mobile unit, T-Mobile Czech Republic, from a consortium of investors led by funds managed or advised by private equity group Mid Europa Partners. The German company is to pay €0.8 billion for a stake of 39.23 per cent. The deal is expected to be completed by the end of February and forms part of Deutsche Telekom's strategy to expand its portfolio in Eastern Europe.

"The acquisition of the remaining shares is a natural step towards optimising our portfolio and supports our transformation into the leading integrated pan-European operator," commented Claudia Nemat, board member for Europe and Technology at Deutsche Telekom, in a statement. "The Czech Republic is an important market for Deutsche Telekom due to its size and structure. With 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 market position in B2B."

T-Mobile Czech Republic is already fully consolidated by Deutsche Telekom, and the transaction will therefore have no impact on group revenue and EBITDA.

Last November, Deutsche Telekom bought GTS Central Europe for €546 million and gained a fibre optic fixed-line and infrastructure business in Central and Eastern Europe. The company is also believed to have offered to buy an additional 10 per cent in Greece's OTE.

Separately, although the Ono reports had not been confirmed by the time FierceWireless:Europe went to press, it has long been rumoured that Vodafone is interested in buying Ono to bolster its fixed assets in Europe as part of its unified communications strategy.

Citing unidentified sources, Bloomberg noted that Ono is due to meet this week about a potential initial public offering or sale of the company. Vodafone is reported to have contacted Ono's main shareholders about a possible purchase, and any bid is expected to be in the range of €7 billion ($9.5 billion) to €8 billion.

Ono is one of the few remaining cable assets in Europe after Vodafone bought Kabel Deutschland last year and Liberty Global acquired Virgin Media. Liberty Global recently secured Ziggo in a deal that values the Dutch cable operator at €10 billion ($13.7 billion) including debt, and is also believed to be interested in Ono.

Ono is already implementing a convergence strategy and said this allowed it to add more than 183,000 new mobile lines from October to December, closing 2013 with 1,085,000 lines. Net churn rate improved by more than 2 points, closing the year at 20 per cent, the company said.

For more:
- see this Bloomberg article
- see this separate Bloomberg article

Related Articles:
Vodafone charts steady course amid European turbulence
Liberty's Dutch move signals cable wars ahead with Vodafone
Report: Vodafone in acquisition talks with Spain's Ono
Deutsche Telekom CEO's OTE visit sparks stake hike speculation
Deutsche Telekom strengthens integrated enterprise play with GTS buy

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