TIDMTDE
RNS Number : 9077J
Telefonica SA
23 July 2013
TELEFÓNICA, S.A. (hereinafter Telefónica) as provided in article
82 of the Spanish Securities Market Act (Ley del Mercado de
Valores), hereby reports the following
SIGNIFICANT EVENT
Telefonica and its German listed subsidiary Telefónica
Deutschland Holding AG (hereinafter, Telefónica Deutschland) have
signed an agreement with Koninklijke KPN NV (hereinafter, KPN),
under which Telefónica Deutschland will acquire the German
subsidiary of KPN, E-Plus Mobilfunk GmbH & Co. KG (E-Plus). KPN
will receive a stake of 24.9% in Telefónica Deutschland and a cash
consideration of 3,700 million Euros.
Subsequently, Telefónica will acquire a 7.3% of Telefónica
Deutschland from KPN for a total price of 1,300 million Euros, and
the ownership of KPN in Telefónica Deutschland will be reduced to
17.6%.
Previously, Telefónica Deutschland will call a General
Shareholders Meeting in order to approve a capital increase to
finance the cash consideration of the transaction. Telefónica will
subscribe the proportional corresponding share in this capital
increase and will guarantee, on its own or through third parties,
the subscription of the remaining percentage of such capital
increase.
The closing of this transaction is subject to certain conditions
such as merger clearance and the approval by the Extraordinary
Shareholders General Meeting of KPN.
Please see attached Press Release and Presentation of the
transaction.
http://www.rns-pdf.londonstockexchange.com/rns/9077J_-2013-7-23.pdf
Madrid, July 23, 2013
NOTA DE PRENSA
PRESS RELEASE
Madrid, 23(rd) of July 2013
TELEFÓNICA AGREES WITH KPN THE ACQUISITION OF E-PLUS TO FORM A
LEADING DIGITAL TELCO IN GERMANY
-- The agreement for the acquisition of KPN's German subsidiary,
E-Plus, includes a total payment of 5 billion euros in cash and a
stake in the resulting company of 17.6%. Telefónica S.A. to finance
4.14 billion euros of the cash payment.
-- In the first phase, the transaction implies Telefónica
Deutschlandpaying KPN an initial payment of 3.7 billion euros in
cash and a 24.9% stake of the resulting company.
-- In the second phase, Telefónica S.A. will buy a 7.3% stake of
the combined entity from KPN for a total of 1.3 billion euros. As a
result, Telefónica will hold a final 65% stake in the new company,
KPN will have 17.6% and the remaining shares will be free
float.
-- The cash payment will be financed via a 3.7 billion euros
rights issue underwritten by Telefónica Deutschland. Telefónica
S.A. will subscribe 2.84 billion euros, in proportion to its
current stake in the company of 76.8%.
-- The transaction will create significant value with expected
synergies valued between 5 and 5.5 billion euros.
-- Telefónica will become the second largest European operator
by number of mobile customers and volume of revenue and will
improve both its growth and cash generation profile.
-- With this operation, Telefónica will enjoy a better risk
profile. The company reiterates its objective to place net
financial debt below 47 billion euros by the end of 2013.
Madrid, 23(rd) of July 2013.- The Telefónica Board of Directors
has approved the acquisition of E-Plus, KPN's subsidiary in
Germany. The operation is subject to obtaining both the relevant
regulatory approval and clearance at KPN's and Telefónica
Deutschland's Extraordinary Shareholders' Meeting. The deal will
result in a new leader in the German mobile market with 43 million
mobile customers and combined revenues of EUR8.6 billion euros. The
transaction is expected to be closed during the first half of
2014.
The transaction provides significant synergy potential,
particularly with respect to distribution, customer service and
network services. The total value of the synergies expected from
the transaction is estimated in between 5 and 5.5 billion euros net
of integration costs. Net savings will be positive from year 2.
The transaction is divided into two phases. In the first phase,
Telefónica Deutschland will acquire 100% of E-Plus for EUR3.7
billion euros in cash and a stake of 24.9% in the combined entity.
This cash payment will be financed via a rights issue for 3.7
billion euros, of which, Telefónica S.A. will subscribe 76.8%, in
proportion to its current stake, corresponding to 2.84 billion
euros.
In the second phase, Telefónica S.A. will acquire from KPN a
stake of 7.3% in the combined entity for a total of 1.3 billion
euros. As a result, Telefónica SA and KPN will hold 65% and 17.6%
of Telefónica Deutschland, respectively, while the remaining
percentage will be free float. Therefore, of the 5 billion euros
paid in cash to KPN, the total amount required by Telefónica S.A to
finance this operation equals 4.14 billion euros.
With this agreement, Telefónica will become Europe's second
largest operator by number of mobile clients and volume of revenue
and will improve both its growth and cash generation profile.
Additionally, Telefónica will gain a leading position in the
largest and one of the most dynamic mobile markets in Europe. The
company will also become the leading operator in terms of number of
accesses, network quality and distribution network in three of its
main markets: Germany, Brazil and Spain.
Creating a leading, sustainable and innovative Digital Telco
focusing on mobile data and LTE development in Germany is a natural
strategic step for Telefónica.
This announcement follows a decisive year in Telefónica's
transformation process, fostered by a series of initiatives that
have allowed a significant strategic shift in the company. Twelve
months ago, Telefónica set itself the strategic objective of
increasing financial flexibility and reducing leverage via several
initiatives, which included proactive management of its asset
portfolio.
As a result of this, the company has reduced net debt by
approximately 10 billion euros since June 2012, including the
recently announced disinvestments. This process has enabled the
company to resume dividend payments, as approved at the AGM last
May, giving continuity to the shareholder policy of dividend
payment year after year.
Finally, it is important to highlight that this transaction will
mainly be financed via financial instruments, which will enable to
maintain Telefónica's leverage ratio stable. In this respect,
Telefónica reiterates its objective to place net financial debt
below 47 billlion euros by the end of 2013.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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