Deutsche Telekom AG (DTE.XE) said Friday that it has reached an agreement with Tele2 AB (TEL2-B.SK) under which T-Mobile Netherlands will acquire Tele2's Dutch business for 190 million euros ($223.8 million) in cash and a stake of 25% in the combined company.
The purchase of Tele2 NL is subject to regulatory approval and is expected to close in the second half of 2018.
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The enlarged company will continue to operate as T-Mobile Netherlands, Deutsche Telekom said, and will also use the Tele2 brand in the market. Deutsche Telekom will own 75% of the shares in the enlarged company and a EUR1.1 billion loan receivable owed from Tele 2 NL's clients.
Deutsche Telekom said the new company will create more effective competition with the KPN Mobile and VodafoneZiggo duopoly in the Netherlands. "This combination means justice for customers," T-Mobile's Chief Executive Soren Abildgaard said.
The transaction is expected to generate annual synergies of about EUR150 million a year within three years of closing, Deutsche Telekom said.
"This is a fantastic opportunity to speed up development of the Dutch telco market," Tele2 AB's Chief Executive Allison Kirkby said.
Prior to completion of the transaction, T-Mobile NL will spin out its mobile tower and rooftop assets into a separate legal entity which will remain in the full ownership of Deutsche Telekom.
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(END) Dow Jones Newswires
December 15, 2017 02:14 ET (07:14 GMT)