(RTTNews) - Bonn, Germany-based Deutsche Telekom AG
(DT) on Monday announced a purchase agreement with Marfin Investment Group to acquire Marfin's 20% stake in Greek telecommunications company Hellenic Telecommunications Organization SA
(OTE) for about 2.5 billion euros.
Marfin Investment Group, or MIG, is a Greek investment firm, which offers investments in private equity, privatizations and infrastructure projects through its subsidiaries. MIG operates mainly in Greece, Cyprus and South East Europe. Earlier this month, MIG reached a deal with the shareholders of Croatian tourism and leisure group Sunce Koncern d.d. for the acquisition of a controlling equity interest in the company.
Deutsche Telekom will pay 26 euros per share for all Hellenic shares held by MIG. Deutsche Telekom said that the execution of the deal is conditional upon approval by the company's supervisory board as well as a shareholder agreement with the Greek government, which holds 28% stake in Hellenic. The purchase also requires approval from the Inter-Ministerial Committee, or IMC, for Deutsche Telekom to increase its stake in implementation of its strategic objectives.
The German telecommunications company expects to initiate discussions with the Greek government with the aim to reach an agreement in the very near future.
Deutsche Telekom, formed in 1996, holds substantial shares in the telecom companies of various countries. The company's Central European subsidiaries include Slovakia's T-Slovak Telekom, Hungary's Magyar Telekom and Croatia's T-Hrvatski Telekom. Magyar Telekom holds majority shares in Orbitel, Bulgaria, Combridge, Romania, MakTel, Republic of Macedonia, and T-Crnogorski Telekom, Montenegro.
Last year, Deutsche Telekom bought France Telecom's (FTE, FTE.L, FNCTF.PK) Dutch mobile and Internet operations, Orange Netherlands, for a total enterprise value of 1.33 billion euros in cash. France Telecom and Deutsche Telekom had been negotiating the deal since June 2007.
In December 2007, Deutsche Telekom's unit, T-Mobile, and Hutchison Whampoa Ltd's UK wireless unit, 3 UK, reportedly agreed to share their wireless networks in the UK to widen their reach and reduce investment costs. The network-sharing deal provides T-Mobile and 3 UK with more coverage for third-generation services, also known as 3G, which allow Internet browsing, videoconferences and music downloads.
3 UK is controlled by Hong Kong-based billionaire Li Ka-shing and has wireless operations in Australia, Austria, Denmark, Hong Kong, Ireland, Israel, Italy and Sweden.
For the recently completed fourth quarter, Deutsche Telekom reported a net loss of 757 million euros, compared to a net loss of 898 million euros last year. Net revenue for the quarter edged down 0.6% to 15.795 billion euros from 15.895 billion a year ago.
DT closed Friday's trade at $17.74, down $0.71, on a volume of 1.62 million shares.
OTE rose $0.11 on Friday and closed trade at $14.94, on a volume of 119,800 shares.
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