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UPDATE 1-Deutsche Telekom pays $1.1 bln for control of Czech unit
February 10, 2014 / 8:56 AM / 4 years ago

UPDATE 1-Deutsche Telekom pays $1.1 bln for control of Czech unit

* Buys 39.23 pct stake in T-Mobile Czech Republic

* Pays 800 million euros for the stake

* Gains full control of the Czech unit (Adds executive comment, background on strategy)

FRANKFURT, Feb 10 (Reuters) - Deutsche Telekom said it would pay 800 million euros ($1.1 billion) for full control of its T-Mobile Czech Republic unit, as it builds an integrated structure of mobile-phone networks and landlines across Europe.

Deutsche Telekom is buying the remaining 39.23 percent stake in the unit it does not already own from a consortium of investors led by private equity group Mid Europa Partners, the German telecommunications group said in a statement on Monday.

A source had told Reuters of the impending deal on Sunday.

The acquisition of the shares is a “natural step” toward transforming Deutsche Telekom into a pan-European operator, said Claudia Nemat, board member for Europe and Technology at Deutsche Telekom.

“With the ongoing integration of T-Systems Czech Republic and the planned combination with the Czech operations of GTS Group, T-Mobile Czech Republic is on a clear strategic path to enhance its fixed-line capabilities and foster its market position in B2B (business to business),” Nemat said in the statement.

Last November, Deutsche Telekom purchased GTS Central Europe for 546 million euros in a deal that earned the Bonn-based company a fibre optic fixed-line and infrastructure business in eastern Europe.

Deutsche Telekom said the acquisition, which is subject to regulatory approval, would have no impact on group revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) because T-Mobile Czech Republic is already fully consolidated.

The deal will allow Deutsche Telekom to simplify the capital and governance structure of the Czech unit and spare the company having to pay annual dividend payments to minority shareholders.

$1 = 0.7343 euros Reporting by Christoph Steitz and Jonathan Gould; Editing by David Holmes

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