Magyar Telekom to merge cable unit to cut costs

BUDAPEST May 25 (Reuters) - Magyar Telekom MTEL.BU plans to legally merge its wholly owned cable service provider T-Kabel to save close to one 1 billion forints ($5 million) in costs per year, the company said in a statement on Monday. Magyar Telekom said the planned merger, subject to the approval of an extraordinary general meeting scheduled for June 29, also involved Del-Vonal Kft, a wholly owned subsidiary of T-Kabel.

"The merger will enable the company to increase cost efficiency by exploiting synergies of joint operation, facilitating cost reductions and the optimal usage of financial and human resources," the company said.

It said the merger required no regulatory approval as the two companies involved were already directly or indirectly controlled by Magyar Telekom.

Magyar Telekom stock closed 1 percent higher at 606 forints on the Budapest Stock Exchange on Monday, underperforming a gain of 2.3 percent in the wider market .BUX. (Reporting by Gergely Szakacs, editing by Will Waterman) ($1=200.00 Hungarian Forint)