Consolidation of mobile positioning in Europe - debt reduction targets of Deutsche Telekom unchanged - transaction will increase earnings power of the group
Deutsche Telekom today held talks with its partners Elektrim S.A. and Vivendi Universal S.A. regarding increasing its stake in the Polish mobile operator Polska Telefonya Cyfrowa Sp.zo.o. (PTC). Deutsche Telekom, through its mobile division T-Mobile , currently owns 49% of the shares of PTC, Elektrim and Vivendi hold their 51% through Elektrim Telekomunikacja (ET). During the talks the partners were made a fair cash offer of EUR 1.0 billion for their shares in PTC.
By increasing its stake in PTC to 100% of the shares, Deutsche Telekom seeks to consolidate its strong mobile presence in Europe. The objective of holding talks with Elektrim and Vivendi is to build on its current position and to increase its exposure to the growth potential of the Polish market. This is in line with the Group's strategy of pursuing profitable growth. The Polish mobile operator is profitable both operationally and after tax. Increasing its shareholding would strengthen the earnings power of the Deutsche Telekom Group and would not be earnings dilutive.
Deutsche Telekom's targets for reducing its net debt are unchanged. If agreement is reached among the parties the transaction would be closed and payment would be made in 2004.