France's Orange has agreed to buy a 54% stake in Telekom Romania Communications from Deutsche Telekom's OTE, in a deal giving the Romanian unit an enterprise value of 497 million euros ($591.1 million), the companies said.
Orange, France's biggest telecoms group, said it would pay OTE 268 million euros for the controlling stake in Romania's second largest player in fixed telecoms on a debt-free, cash-free basis subject to customary adjustments at closing.
OTE, the Greek operator which is 46% owned and managed by Deutsche Telekom, said the transaction was expected to be completed in the second half of 2021. OTE would retain its ownership in Telekom Romania’s mobile business, it added.
Telekom Romania Communications reported 2019 revenues of 622 million euros. It provides fixed-line voice, broadband and pay-tv services to 5 million customers.
“This acquisition is an important step to accelerate our convergence strategy in Europe. Romania is a key market for Orange and a great success story,” said Orange Deputy Chief Executive Mari-Noëlle Jégo-Laveissière.
OTE has been looking to divest its stake in Telekom Romania to focus investment on next-generation 5G networks in Greece.
“The sale of Telekom Romania is a strategic decision in the context of OTE Group’s redefined priorities and growth plans,” OTE’s Chief Executive Michael Tsamaz said in a statement.