Deutsche Telekom said it is to acquire the 49 per cent of Slovak Telekom it does not already own for €900 million ($1 billion), confirming previous reports that it was the sole bidder for the government-owned stake.
The transaction is not subject to regulatory approvals and is expected to be completed in the coming weeks. Slovakia had originally intended to sell its 49 per cent stake via an initial public offering, but scrapped the move after it received a higher offer from majority shareholder Deutsche Telekom.
"We want to be a European leader," Deutsche Telekom CEO Timotheus Hoettges said at a briefing in Bratislava, Bloomberg reported. "We want to be successful in Slovakia. Acquiring the 100 per cent stake is a logical outcome of our presence."
Claudia Nemat, board member for Europe and technology at Deutsche Telekom, described Slovak Telekom as a highly attractive asset and the only operator in Slovakia with quad-play capabilities.
"It is the market leader in fixed line, fixed broadband and pay-TV, as well as the second-largest mobile player in Slovakia," Nemat commented.
She added that Slovak Telekom is the second of the group's subsidiaries to offer an all-IP network. The operator also recently launched the Magenta One converged fixed and mobile offering that was first launched as MagentaEINS by Deutsche Telekom in Germany last year.
The German operator noted that Slovak Telekom is already a fully consolidated subsidiary and said the transaction has no impact on group revenue and EBITDA. "However, the acquisition of the remaining shares leads to an increase in earnings per share attributable to the shareholders of Deutsche Telekom," it added.
Slovak Telekom reported revenue of €187.4 million for the first quarter of 2015, down 1.7 per cent year-on-year. Adjusted EBITDA declined by 6.4 per cent to €73.3 million. The company also said its LTE coverage now reaches 55 per cent of the population.
The move to buy the rest of Slovak Telekom aligns with Deutsche Telekom's strategy to create a more integrated group in Europe, where it is present in 12 markets.
The company also recently unveiled a campaign to support its strategy to become "the leading telco in Europe". It plans to invest more than €6 billion in the expansion of its European networks by 2018, complete the migration of customer lines to all-IP and offer more cloud-based products across borders.
Slovenia continues telecoms sale process after receiving just one bid
Deutsche Telekom, Cisco launch Cloud VPN service in 3 EU countries
Deutsche Telekom extols 5G, as European Commissioner unveils 5GPPP vision document
Deutsche Telekom unveils 'hybrid' Internet for Germany