Telefonica’s German unit agreed to buy Royal KPN’s E-Plus mobile-phone business for €5 billion in cash and a stake in the combined entity to add users in the country and reduce costs.
KPN gets a 17.6 per cent holding in Telefonica Deutschland as part of the transaction, the Dutch carrier said today in a statement.
The deal will have “synergies” of €5 billion to €5.5 billion, the company said.
E-Plus was worth about €8.5 billion a year ago, according to Rabobank International estimates at the time.
The value has shrunk rapidly and may be as little as €4.5 billion including synergies with O2, according to Sanford C. Bernstein analysts’ projections.
O2 and E-Plus compete with market leaders Deutsche Telekom and Vodafone.
The elimination of a carrier by combining the third- and fourth-largest operators will be a test for antitrust regulators.
Telefonica recently agreed to sell its Irish business to Hong Kong billionaire Li Ka-shing's local unit called Three.
Bloomberg
