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Deutsche Telekom to buy 100% of its Czech unit

Staff writer |
Deutsche Telekom AG (DTE) agreed to acquire full ownership of its Czech unit, betting on a recovery in the eastern European telecommunications market.

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The owner of the T-Mobile brand will pay 828 million euros ($1.1 billion) for the remaining 39.2 percent stake in the Czech unit from Falcon Group led by Mid Europa Partners LLP, according to a statement from the private-equity firm. The transaction won't require regulatory approval, Bonn-based Deutsche Telekom said in a release.

The carrier has offered mobile services in Germany's eastern neighbor since 1996. The Czech company had 5.7 million wireless customers and 119,000 landline connections at the end of the third quarter, and revenue fell 16 percent to 229 million euros during the period.

Falcon Group is 75 percent owned by Mid Europa. The T-Mobile stake was part of a 1.2 billion-euro leveraged buyout of Czech phone company Radiokomunikace AS by Lehman Brothers Holdings Inc. and Mid Europa in 2006.

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