We continue with the dance of corporate operations in the telecommunications sector. It seems that we are not going to have a week without significant news between now and the end of the year, although it is not ruled out that these “turbulence” will continue for longer. The latest that we have just learned is that Telefónica has launched an offer to acquire the 28.19% that it does not own of its subsidiary in Germany for 1,970 million euros.
All this is perfectly reflected in a statement sent to the National Securities Market Commission (CNMV):
“The Delegate Committee of Telefónica, acting under the authorization granted by the Board of Directors, has agreed today to present, through Telefónica Local Services GmbH), a voluntary public offer for the acquisition of shares of the type partial shares representing approximately a maximum of 28.19% of the share capital and voting rights of Telefónica Deutschland Holding AG.
Eliminate minority shareholders
Currently, Telefónica owns the remaining 71.81% of the share capital and voting rights of Telefónica Deutschland and now its intention is to control 100% of the company’s capital, in addition to the votes. The operator will pay 2.35 euros in cash for each share according to the statement presented to the CNMV.
There they also explain that they intend to increase Telefónica Deutschland’s contribution to the consolidated profit and cash flows attributable to Telefónica shareholders and reinforce Telefónica’s strategy of focusing on its main geographic markets (which we already know are Spain, Brazil, Germany and United Kingdom through its different brands).
In a quick summary, the objective that Telefónica pursues with this operation is to dispense with minority shareholders to ensure absolute control of its subsidiary in Germany. However, there are some challenges ahead that must be faced firmly. For example, we know that the subsidiary in Germany is going to suffer after the loss of 1&1.
As we know, on August 2 it became official that the German subsidiary O2 Deutschland had lost the wholesale contract to provide service to 1&1, its main virtual operator that rented the mobile network and had nearly 12 million customers.
Meanwhile, the rest of the market is becoming increasingly competitive, which will force operators to make risky decisions. In this case, Deutsche Telekom will have to be more aggressive in its rates, which will further reduce the margins of the rest of the country’s operators.
