Orange Romania said it signed the agreement for the acquisition of a majority stake in Telekom Romania's fixed division from Greece' OTE. The transaction includes the 54 percent stake held by OTE and the subscribers of the fixed-mobile converged services. The remaining 46 percent is held by the Romanian state.
OTE will retain ownership of Telekom Romania's mobile division. OTE said the sale is not expected to have a material impact on its free cash flow outlook or its debt position. The company has been working on a sale of the Romanian business since at least last year.
Orange said it agreed to pay EUR 268 million for the majority stake in the fixed business, on a debt- and cash-free basis. The entire company is valued at EUR 497 million.
Orange is already the largest mobile operator in Romania, with EUR 1.1 billion in sales last year. The deal takes the mobile operator into the fixed market, with the aim to become the preferred choice of customers for convergent services on the Romanian market, both for the consumer and business segment, Orange said. The transaction will also generate significant synergies, which will result from the combined sale of services to existing customers, as well as the optimisation of the network, including economies of scale and scope.
Telekom is Romania’s second largest player in fixed telecoms with revenues of EUR 622 million in 2019. Through its own network infrastructure, TKR provides fixed voice, broadband and pay-TV services to 5 million customers and its approximately 90,000-km fibre network connects some 3 million households. It also provides fixed-mobile convergent services to around 881,000 subscribers through a MVNO contract with Telekom Romania Mobile. These customers will migrate to Orange Romania’s network following completion of the transaction.
The transaction's closure is subject to usual preconditions, in particular approval by the European Commission and other competent authorities. The deal is expected to be completed in H2 2021. Both companies will continue to operate independently until the deal's approval and completion.
