- Deutsche Telekom AG is systematically implementing its ‘focus, fix and growth’ strategy and strengthening its position in the Dutch market.
- Number of T-Mobile customers in the Netherlands rises by more than 2.1 million to around 4.8 million at present
- Purchase price of about EUR 1.3 billion on a debt/cash free basis
- Total NPV of synergies after restructuring costs approximately EUR 1.0 billion
Deutsche Telekom AG's Group company, T-Mobile Netherlands, has concluded a contract with France Télécom for the acquisition of the Dutch telecommunications provider, Orange Netherlands. The parties agreed on a purchase price of about EUR 1.3 billion on a debt/ cash free basis. The Works Council of Orange Netherlands was informed and involved in this process in accordance with Dutch law. The European Commission has already approved the acquisition of Orange Netherlands by Deutsche Telekom AG. Deutsche Telekom AG expects the deal to be closed on October 1, 2007.
In the next few years, Deutsche Telekom AG anticipates the business combination generating synergy effects totaling a net present value of approximately EUR 1.0 billion, with around half of this being generated in the first six years, in particular from network integration and reduced marketing expenses.
René Obermann, Chairman of the Board of Management of Deutsche Telekom AG, comments on the transaction: "We are on the right track for implementing our 'focus, fix and grow' strategy. We have promised to focus on ‘Growing abroad with mobile communications’ and are systematically doing so with the purchase of Orange Netherlands. This move clearly underlines our expansion efforts."
The joining of forces of T-Mobile and Orange Netherlands brings together two successful telecommunications companies with a total of 4.6 million mobile customers at the end of 2006. The combined number of customers of both companies currently stands at around 4.8 million. The acquisition strengthens Deutsche Telekom AG's position in the competitive Dutch market. T‑Mobile Netherlands is the third largest mobile communications provider in the Netherlands, with revenues of EUR 1.1 billion in the 2006 financial year. With 2.0 million customers at the end of 2006, Orange Netherlands is the fourth largest mobile communications operator in the Netherlands. The company generated overall revenues of around EUR 0.6 billion last year. EBITDA for financial year 2007 is expected to be in the order of EUR 120 million for the Orange Netherlands mobile business. Orange Netherlands additionally operates a broadband business, which had around 554,000 customers at the end of the 2006 financial year. The acquisition of Orange Netherlands has no significant effect on the proportion of Deutsche Telekom AG's net financial liabilities against its EBITDA, the ratio of which was about 2:1 for the 2006 financial year.
Once the transaction has been concluded, T-Mobile Netherlands will drive forward the integration of the two companies at full pace in order to contribute to Deutsche Telekom AG's continued international growth.
Fact sheet on the acquisition of Orange Netherlands (pro forma): 1. T-Mobile NL and Orange Mobile NL combined
- Mobile customers (as of Dec. 31, 2006): 4.6 million of which T-Mobile Netherlands: 2.6 million customers of which Orange Netherlands: 2.0 million customers Orange Broadband: 554,000 customers
- Market share (as of Dec. 31, 2006) based on number of SIM cards: around 27 percent of which T-Mobile Netherlands: around 15 percent of which Orange Netherlands: around 12 percent
- Mobile Revenue (FY 2006): EUR 1,759 million of which T-Mobile Netherlands: EUR 1,138 million of which Orange Netherlands: EUR 621 million
2. Appropriate purchase price
- Purchase price of about EUR 1.3 billion, on a debt/ cash free basis
- Synergies with a net present value totaling approximately EUR 1.0 billion (after restructuring costs) expected
3. Overview of Orange NL
- Has operated a mobile network in the 1,800/900 MHz band under the name Dutchtone since 1999.
- Company rebranded as Orange in 2003.
- Orange UMTS services launched in late 2006.
- The company focuses on building a mobile network and providing mobile services to customers.
- 1994: Start of operations in the Dutch market when EuroNet Internet was established.
- Acquired by France Télécom in 1998.
- 1999: Company rebranded as Wanadoo.
- 2006: Wanadoo rebranded as Orange.
- Core business is providing broadband services including high-speed Internet and Voice over IP (VoIP). Over its own backbone network, the company provides fully unbundled ADSL access coverage.
- With a total of over 0.6 million subscribers, Orange Broadband is currently the number four broadband provider and the number two ADSL provider in the Netherlands.
The Dutch mobile communications market in 2006
- Population of 16.6 million
- Market penetration of over 103%
- Four mobile communications providers with their own networks: KPN, Vodafone NL, T-Mobile NL, Orange NL
- Over 50 mobile communications providers with no network of their own (MVNO/SP)
Forward-looking statements This press release contains forward-looking statements that reflect the current views of Deutsche Telekom’s and T-Mobile’s management with respect to future events. They are generally identified by the words “expect,” “anticipate,” “believe,” “intend,” “estimate,” “aim,” “goal,” “plan,” “will,” “seek,” “outlook” or similar expressions and include generally any information that relates to expectations or targets for revenue, adjusted EBITDA or other performance measures. Forward-looking statements are based on current plans, estimates and projections. You should consider them with caution. Such statements are subject to risks and uncertainties, most of which are difficult to predict and are generally beyond Deutsche Telekom’s control, including those described in the sections “Forward-Looking Statements” and “Risk Factors” of the Deutsche Telekom’s Form 20-F filed with the U.S. Securities and Exchange Commission. Among the relevant factors are the impact of other significant strategic or business initiatives, including acquisitions, dispositions and business combinations and cost saving initiatives that may have a material adverse effect on costs and revenue development. If these or other risks and uncertainties materialize, or if the assumptions underlying any of these statements prove incorrect, Deutsche Telekom’s actual results may be materially different from those expressed or implied by such statements. Deutsche Telekom can offer no assurance that its expectations or targets will be achieved. Deutsche Telekom does not assume any obligation to update forward-looking statements to take new information or future events into account or otherwise.