Deutsche Telekom is planning to strengthen its position in Eastern Europe and has already targeted a potential acquisition target in Poland, according to a Dow Jones Newswires report.
Citing unnamed sources close to the situation, Dow Jones Newswires said Germany's largest operator by revenue is in talks to buy Warsaw-based GTS Central Europe for about €600 million ($776 million). The company provides voice and data services to businesses and operators in Poland, Czech Republic, Hungary, Romania and Slovakia. Its owners are financial investors Columbia Capital, M/C Venture Partners, Innova Capital, HarbourVest Partners, Oak Investment Partners and Bessemer Venture Partners.
DT declined to comment, according to the report.
Meanwhile, the sources also told Dow Jones Newswires that Deutsche Telekom could also come under pressure to buy the 40 per cent stake it does not already own in T-Mobile Czech Republic. The stake was recently put up for sale by private equity firm Mid Europa Partners. Neither Deutsche Telekom nor Mid Europa has commented on a deal.
Central and Eastern Europe "has been defined as a core market for Deutsche Telekom despite the recent economic headwinds in the region," Bankhaus Lampe analyst Wolfgang Specht told Dow Jones. He added it would make sense to strengthen operations in existing markets
Nevertheless, there are different agenda behind any potential deals for GTS and T-Mobile Czech Republic. While Deutsche Telekom appears to be actively seeking to buy GTS, it is not in any hurry to buy the outstanding 40 per cent stake in the Czech operator. Dow Jones Newswires cited sources as saying that Deutsche Telekom is content with its 60.8 per cent controlling stake it valued at €1.75 billion at the end of last year, and would prefer another investor to buy Mid Europa's stake. However, the German operator would be willing to buy the stake if necessary, the report added.
In a separate report, IPTV News said Deutsche Telekom has made its fifth startup investment via its investment vehicle Hub:raum, investing €500,000 in Berlin and Amsterdam-based Vigour, which has built a platform that enables unified video experiences on any device.
Deutsche Telekom is currently following a strategy of strengthening or streamlining its operations where required. For example, it recently merged its T-Mobile US business with U.S.-based MetroPCS to increase its footprint in the country. It is also reported to be on the verge of kicking off the sale of its Scout24 Holding GmbH digital classifieds business, according to Bloomberg.
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