KPN to sell E-Plus to Telefonica Deutschland
Royal KPN N.V.'s (KPN) Supervisory Board and Board of Management announced that KPN has entered into a transaction, subject to shareholder approval, to sell and transfer 100% of its interest in E-Plus to Telefonica Deutschland for EUR 5.0 billion in cash and a 17.6% stake in Telefonica Deutschland post transaction. The transaction will unlock estimated German mobile synergies of EUR 5-5.5 billion.
KPN will use the majority of the cash proceeds to increase its financial flexibility and intends to recommence dividend payment to shareholders for 2014. The KPN Boards will ask shareholders to vote on the transaction at an Extraordinary General Meeting.
The opportunity to unlock significant value in Germany by selling E-Plus is clear and compelling. The significant premium embedded in the sale price recognizes the substantial operational synergies. The combination of E-Plus and Telefonica Deutschland will establish a mobile operator with attractive synergy and growth potential in Europe's largest economy. KPN Group post the sale of E-Plus will focus on its core geographies," said Eelco Blok, CEO of KPN.
"In Germany we are implementing the next phase of our strategy towards a data-centric Challenger, which already resulted in strong postpaid net adds and data growth in the first half of 2013. I can assure you that we will remain fully focused on executing our operational strategy and will be committed to our customers and employees", said Thorsten Dirks, CEO of E-Plus.
At completion of the transaction, KPN will transfer 100% of its interest in E-Plus to Telefonica Deutschland for a consideration consisting of EUR 3.7 billion in cash and newly issued shares in Telefonica Deutschland, representing 24.9% of the share capital.
Simultaneously, Telefonica S.A. will acquire a 7.3% interest in Telefonica Deutschland from KPN for a cash consideration of EUR 1.3 billion. KPN's remaining interest of 17.6% in Telefonica Deutschland will be subject to a lock-up period of 180 days. ■