Monday, 18 October 2021

Deutsche Telekom sells Dutch unit, ups stake in T-Mobile

by Harry Baldock, Total Telecom
Tuesday 07 September 21

The operator has agreed to sell T-Mobile Netherlands to a consortium comprising Apax and Warburg Pincus for a total of €5.1 billion

Today, Deutsche Telekom has announced the sale of its Dutch unit, confirming rumours that have been circulating for many months surrounding a potential sale.  Back in January, sources speaking to Dutch media suggested that the German operator was looking to divest of the business, aiming to raise €5–6 billion. By summer, multiple private equity firms were in discussions about a potential acquisition…

Today, Deutsche Telekom has announced the sale of its Dutch unit, confirming rumours that have been circulating for many months surrounding a potential sale. 

Back in January, sources speaking to Dutch media suggested that the German operator was looking to divest of the business, aiming to raise €5–6 billion. By summer, multiple private equity firms were in discussions about a potential acquisition, including Apax Partners, Apollo Global Management Inc., BC Partners, Providence Equity Partners, and Warburg Pincus, according to sources. More recently, India’s telco giant Reliance Jio was also noted as being interested in the acquisition, which would have been its first operator play outside of India.  

Now, it seems that a deal has finally been struck, with two of those key players – Apax and Warburg Pincus – forming a new consortium for a €5.1 billion takeover bid.

T-Mobile Netherlands has long been on the chopping block for Deutsche Telekom. Talks of a potential sale were first noted back in 2015, but no deal was ultimately struck. Since then, the company has never been far away a sale, with EQT rumoured to be a potential buyer in November 2019. 

The funds raised from the sale of T-Mobile Netherlands will not sit idle for long. In fact, Deutsche Telekom has today announced that it will increase its stake in T-Mobile US to over 48%, in part through the use of funds from its Dutch sale, but also via issuing new shares to SoftBank in exchange for the latter’s in T-Mobile US.

The combined transaction will see Deutsche Telekom’s stake in the US unit increase by 5.3% to 48.4%, while SoftBank’s will shrink to 3.3%. In exchange, Softbank will receive cash and a 4.5% stake in Deutsche Telekom, making them the second-largest private shareholder in the telco.

In total, the transaction is estimated to have cost Deutsche Telekom around $2.4 billion.

“This is a very attractive transaction for Deutsche Telekom and its shareholders to further benefit from the value creation potential in T-Mobile US and beyond,” said Hoettges. “But we are not just increasing our stake in T-Mobile US – we are welcoming SoftBank as a new key investor and strategic partner for Deutsche Telekom.”

This transaction will leave Deutsche Telekom just shy of its ultimate goal of majority ownership of the highly profitable US unit. 

In related news, Reuters is also reporting today that Deutsche Telekom is considering its options with regards to its 12% stake in BT. Billionaire Patrick Drahi’s Altice purchased a 12.1% stake in BT for £2 billion back in June, which has generated rumours of a potential takeover offer.

“We have a lot of optionality in the BT business. It's too early to make a decision. We are entertaining all options,” said CEO Tim Hoettges earlier today.

 

Will this sale change the connectivity landscape in Germany? Find out from the experts at this year’s live Connected Germany event

Also in the news: 
O2 bribery probe resurfaces
Veon raises almost $1bn in Russian tower sale
TIM mulling bid for $1 billion Italian cloud hub project

 

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