Reliance reportedly closes in on acquiring T-Mobile Netherlands

India’s Reliance Industries is said to be lining up potential investors to finance its ambition to acquire Deutsche Telekom’s mobile business in The Netherlands, a deal that could cost the Jio parent company $5.7 billion.

First reported by The Hindustan Times, Reliance Industries Ltd (RIL) is said to be preparing to launch a $5.7 billion non-binding bid for T-Mobile Netherlands BV. The paper quoted unnamed sources that Mukesh Ambani’s conglomerate is shortlisting lenders to finance the deal, and Akash Ambani, Mr Ambani’s 29-year-old son who leads Jio, is personally overseeing the transaction. The bid could come within a month, the sources said.

Reliance’s interest in T-Mobile Netherlands surfaced last month when it was reported that Deutsche Telekom, which owns 75% of T-Mobile Netherlands, would value the company at around $5.9 billion. Sweden’s Tele2 owns the other quarter of the operator.

Earlier, in July it was already reported that DT had already selected Morgan Stanley to help it sound out potential buyers, for a lower valuation of €4.5 billion ($5.3), although interested parties at the time were said to be mainly from the familiar quarters, including Apax Partners, Apollo Global Management, BC Partners, Providence Equity Partners, and Warburg Pincus.

T-Mobile Netherlands have gone through a healthy growth period. According to the operator’s data shared at the most recent Capital Markets Day (May 2021), T-Mobile outperformed its competitors KPN and Vodafone in the Netherlands market, registering the fastest service revenue CAGR between 2018 and 2020, and it had experienced the fifth consecutive year of EBITDA growth to reach €554 million ($657 million) in 2020.

So, twenty years after it entered the Dutch market it looked like Deutsche Telekom is ready to cash in on its mobile investment, which the company calls a “crown jewel”. Meanwhile, an acquisition of a DT establishment in the Europe would also give Reliance a foothold in the mature markets, and probably a needed diversification.

Calculated using the latest research from Omdia, Reliance’s speculated amount for each T-Mobile Netherlands’s user would equal to about 10 times their annual ARPU.

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