Deutsche Telekom to Acquire Tele2 AB's Dutch Business

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.

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.

Write to Marc Bisbal Arias at marc.bisbalarias@dowjones.com

(END) Dow Jones Newswires

December 15, 2017 02:14 ET (07:14 GMT)