Telefonica wins approval with sweetened KPN deal

It looks like America Movil has given its approval to the takeover of KPN’s German unit E-Plus after Telefónica Deutschland sweetened its original deal.

Mexico City-based América Móvil said Monday it would support the sale of E-Plus at the improved terms, which will see KPN receive €5bn in cash and a 20.5 per cent stake in Telefónica Deutschland post transaction, for a total transaction value of €8.55bn compared to the previous announced value of €8.1bn.

América Móvil holds, directly and indirectly, approximately 29.77 per cent of KPN and given that it launched its own offer to acquire 100 per cent of the company earlier this month, there were some concerns it would block Telefónica’s move. But those concerns have now been allayed and the board is set for the biggest shakeup of the European telecoms sector for years.

Telefonica confirmed that America Movil has irrevocably committed to vote in favour of the transaction at the Extraordinary Shareholder Meeting of KPN.

Telefónica still needs support from antitrust regulators for the deal but if it wins approval it stands to create the largest mobile operator by subscriber numbers in one of Europe’s strongest markets; the companies’ combined subscriber base would stand at 40.63 million, as of March 2013 according to Informa’s WCIS.

Deutsche Telekom is currently the market leader in Germany with 37 million subscribers. Vodafone, with its 29.17 million subscribers, is also looking to boost its presence in the country with the acquisition of Kabel Deutschland.

The extraordinary general meeting will be held on 2 October 2013.

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