The transaction, which valued TKR at €497 million and Orange’s acquired stake at €296 million, will allow Orange, which is already the leading mobile operator in Romania, to create a fully fixed and mobile convergent operator across consumer, business and ICT markets. Orange notes that TKR is Romania’s second largest fixed telecom player and had revenues of €633 million in 2020. Employing its own network infrastructure, it provides pay-TV, broadband and fixed telephony to around 5 million customers and its approximately 90,000km fibre network connects almost 3 million households.
It also provides convergent services to close to 916,000 fixed-mobile convergent subscribers as of the end of Q2 this year through an MVNO contract with Telekom Romania Mobile. These customers will be migrated to Orange Romania’s network in due course shortly, following the completion of the transaction.
Both companies will continue to operate as two separate legal entities. Liudmila Climoc will continue her responsibilities as CEO of Orange Romania, and the TKR board of directors has just appointed Andrei Popovici, as CEO of TKR.
Commenting on the transaction, Mari-Noëlle Jégo-Laveissière, deputy CEO, in charge of Orange in Europe, said: “Today is a landmark day for Orange as this acquisition will propel Orange Romania forward in its convergence ambitions. Convergence is the key to our growth across Europe, and Romania is a key part of the Group’s European success story”.
Liudmila Climoc, CEO, Orange Romania, added: “We are part of a defining moment not only for Orange, but for the entire telecoms market in Romania. I am very proud that Orange Romania and TKR teams have reached this point. We now move forward together, as a joint force and with a common goal – to be the first choice for convergent services in Romania. Together, we will build for our customers a complete offer with extended fixed coverage, mobile services from Orange, including expanding 5G coverage, more varied TV content and ICT solutions that support the digital transformation of businesses and public administrations”.
Meanwhile, OTE says it anticipates distributing to shareholders approximately €174 million, in the form of extraordinary dividend and incremental share buybacks. The dividend distribution, subject to appropriate corporate approvals, is expected to take place within 2021. The company adds that it will proceed with a new announcement with the relevant details.
OTE’s Chairman and CEO, Mr. Michael Tsamaz, said: “The sale of Telekom Romania Fixed is a strategic decision enabling OTE’s rapid infrastructure rollout in Greece and enhancing its long-term growth outlook and shareholder value. In Romania, it will support the growth of Telekom Romania Fixed and drive market competitiveness benefiting Romanian customers and society.
“OTE remains in the Romanian market with Telekom Romania Mobile, targeting positive cash flow generation through a revamped market approach. It is therefore a transaction that benefits all parties involved. I would like to thank Telekom Romania’s management and employees for all the company’s accomplishments to date and wish them a prosperous future”.