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Deutsche Telekom buys remaining Slovak Telekom stake for €900m

deutsche telekom-logo-roofDeutsche Telekom has confirmed that it is buying the 49% stake of Slovak Telekom that it does not already own for a purchase price of €900 million.

Announcing the deal, Deutsche Telekom said it is buying the shares, which are currently owned by the National Property Fund of the Slovak Republic, for a price that corresponds to 3.8 times Slovak Telekom’s EBITDA.

“As the only operator in Slovakia with quad-play capabilities, Slovak Telekom is a highly attractive asset,” said board member for Europe and technology at Deutsche Telekom, Claudia Nemat.

“It is the market leader in fixed line, fixed broadband and pay TV, as well as the second largest mobile player in Slovakia. Furthermore, it is the second of our subsidiaries to already offer an all-IP network, and with the recent introduction of its Magenta One converged fixed mobile services continues to be at the forefront of innovation within our Group.”

Deutsche Telekom said that the deal will allow it to simplify the capital and governance structure of Slovak Telekom, and that the transaction will have no impact on group revenue and EBITDA.

The news follows reports last week claiming that a full takeover offer by Deutsche Telekom had led the Slovakian government to recently cancel its proposed IPO of Slovak Telekom.

In April, Slovak Telekom set its initial public offering price range at €17.7 to €23.6 per-share, valuing the company at between €1.5 billion and €2.0 billion.

However, speaking on Deutsche Telekom’s earnings call last week, CEO Timotheus Höttges refused to comment on the speculation, saying that Slovak Telekom was “part of the very core of our strategy,” but that it would be “premature to speculate about any possible transaction or not.”

The deal is now expected to close in “the coming weeks,” subject to regulatory approvals.