Telefonica's German unit acquires KPN mobile business
Telefonica SA announced that their German unit has agreed to buy Royal KPN NV's E-plus mobile business. The deal was set for EUR5 billion or US$6.6 billion to be paid in cash and a stake in the combined entity. KP will get 17.6% stakes in the Telefonica Deutschland Holding AG as part of the deal. The company said that the deal will include "synergies" estimated at EUR5 billion to EUR5.5 billion.
Last year, E-Plus was estimated to be worth EUR8.5 billion. The company's value had shrunk radically and is now estimated at EUR4.5 billion, including the synergies with O2. E-Plus and O2 are in competition with Vodafone Group Plc and Deutsche Telekom AG in mobile phone industry. With the elimination of a direct competitor via the combination of the third and fourth largest operation proves to be a test for the antitrust regulators. Recently, Telefonica agreed to sell the company's Irish business to the Li Ka-shing unit, Three.