KPN's wholly owned subsidiary KPN Mobile International has entered into an agreement with Versatel Telecom International and Versatel Nederland for the acquisition of Tele2 Belgium and Versatel Belgium for a consideration of EUR 95 million on a debt and cash-free basis. This acquisition will allow KPN's mobile subsidiary BASE to further expand its regional distribution reach in Belgium, while driving further revenue growth through cross-selling and up-selling opportunities, which will also include bundled product offers. Tele2's substantial residential subscriber base in specific regions and its deeply rooted position in the B2B market, will allow BASE to expand and grow its presence in Belgium as a result of this acquisition. For Versatel, the transaction will have a positive one-time profit and loss effect on Versatel of approximately EUR 5 to EUR 10 million. Versatel will use the proceeds of the transaction to repay an outstanding loan to the Tele2 group, while at the same time securing a stand by facility from Tele2 for the same amount to fund, inter alia, general corporate purposes.
Commenting on the transaction Stan Miller, member of the board of KPN and CEO of its International activities said: "Over the last 5 years, BASE has become the leading challenger mobile company in Belgium and Europe in terms of growth and margin. It has increased its market share from less than 10 percent to more than 22 percent. Through this acquisition along with the recently announced purchase of Allo Telecom, I am confident that BASE now has the distribution and sales capability to continue to grow its business in Belgium in a profitable way". KPN intends to run Tele2 Belgium independently from BASE. The transaction is subject to approval from the Belgian competition authorities. Lazard acted as financial advisor to KPN on this transaction.
