The deal, which values 100% of TKR at €497 million, is on a debt-free, cash-free basis and subject to customary adjustments at closing of the transaction, such as for net debt, working capital and pre-closing items. It also only applies to Telekom Romania’s fixed business, with OTE retaining ownership of Telekom Romania Mobile Communications.
Following completion, the Romanian state will retain its minority (46%) stake in TKR.
TKR currently operates a nationwide fixed network serving around 5 million customers, of which 1.2 million receive TV and 930,000 broadband services. It is the second largest player in Romania ‘s fixed telecom market and had a reported turnover of €622 million in 2019. Its 90,000km fibre-optic network connects around 3 million households and as of June 30 this year it had around 881,000 fixed-mobile convergent customers following an MVNO contract with Telekom Romania Mobile. These customers will migrate to the Orange Romania mobile network after the transaction is completed.
Meanwhile, Orange is the leading mobile operator in Romania and had a reported turnover of €1.1billion in 2019.
Commenting on the transaction, which is subject to regulatory approvals and other conditions and is expected to be completed within the second half of 2021, Mari-Noëlle Jégo-Laveissière, deputy CEO for Orange in Europe, said: “This acquisition is an important step in accelerating our convergent strategy in Europe. Romania is a key market for Orange and a remarkable success story. The transaction confirms our long-term commitment on the Romanian market. We aim to contribute to the development of the telecom sector through constant investments in high-performance network infrastructures and innovative services”.
Liudmila Climoc, CEO of Orange Romania, added: “It is an important moment for the Romanian telecommunications market, which will increase its attractiveness both in terms of converged telecom services and high quality infrastructure, while increasing competition. This transaction will bring new opportunities for the development of converged services, with more benefits and a wider range of options for customers, but also for the sustainable development of the digital economy. The complementarity of the two networks will allow us to bring together not only customers and teams, but also the best expertise in the quality of services and a fixed and mobile network infrastructure prepared for the challenges of the future”.
OTE’s chairman and CEO Michael Tsamaz said: “The sale of Telekom Romania is a strategic decision in the context of OTE Group’s redefined priorities and growth plans, in order to support the group’s development and create value for all stakeholders. OTE has committed extensive resources over the years to support Telekom Romania’s performance, while it remains in the market through Telekom Romania Mobile. I would like to thank Telekom Romania’s management and employees for the company’s accomplishments to date and I am confident that they will continue to offer their best not only during the period till the completion of the transaction, but also under the new ownership. The acquisition of the company by Orange Romania ensures its future growth and creates the conditions to further strengthen market competitiveness to the benefit of its customers and to support the digital transformation of the Romanian economy and society”.