• T-Mobile Netherlands to acquire Tele2 NL in exchange for EUR 190 million cash and a stake of 25 % in the combined company
• Deutsche Telekom to retain majority ownership and continues to consolidate T-Mobile NL
• Customers will benefit from attractive fixed mobile product packages enabled by the combination of T-Mobiles #1 mobile network and Tele2’s fixed-network capabilities
• Significant synergy potential with an estimated net present value in excess of EUR 1 billion allows for disruptive customer propositions
• Complementary spectrum as well as sustainable capex will enable early 5G deployment and ensure highest level of customer satisfaction.

12-15-2017: ​​​​​​​Deutsche Telekom AG and Tele2 AB today announced that they have reached an agreement under which T-Mobile NL (“T-Mobile”) will acquire Tele2’s Dutch business (“Tele2 NL”) for a combination of cash and shares. The enlarged company will continue to operate as T-Mobile Netherlands and will also use the Tele2 brand in the market.

The transaction will establish a true customer champion. This third converged player in the Dutch market will be able to compete more effectively with the KPN and VodafoneZiggo duopoly due to enhanced scale, combined spectrum resources and significant synergy potential.

The transaction is part of a long-term investment vision of Deutsche Telekom to create a more sustainable operation in the Netherlands to disrupt the Dutch telco industry in favor of the customer.

Søren Abildgaard, CEO of T-Mobile: “I would like to congratulate all our customers and all others who are looking for attractive alternatives. This combination means justice for customers. This duo has been getting away with this game for far too long and there was only one victim, namely the customer! No more. No longer. We will be able to compete against the duopoly much more efficiently and give all Dutch customers a fair choice. We are never going to stop breaking down barriers and will continue to challenge this industry in the years to come.“

The transaction establishes a sustainable challenger to the current FMC duopoly as the enlarged company will combine the strength of both T-Mobile NL and Tele2 NL:

• The best-tested #1 network in the Netherlands with improved spectrum portfolio through the addition of Tele2’s 800 MHz and 2,600 MHz licenses, boosting network capacity for disruptive mobile data propositions while maintaining quality in terms of speed and low latency
• Access to Tele2 NL’s B2B fixed-line infrastructure and improved scale in B2C broadband
• Complementary strength in distribution through the shop network of T-Mobile and online distribution strength of Tele2 NL

“We’ve started our journey to disrupt the Dutch market and we will be creating a viable and strong attacker of the duopoly KPN and VodafoneZiggo. We now can truly live up to our promise to become the customer champion,” said Thorsten Langheim, Head of the Group Development segment of Deutsche Telekom overseeing T-Mobile NL.

Allison Kirkby, President and CEO of Tele2 AB, comments: “This is a fantastic opportunity to speed up development of the Dutch telco market and to spur effective competition to the benefit of the Dutch population. I see this as a logical next step to become part of a stronger number three player that will benefit our customers, our shareholders and our employees”.

The enlarged T-Mobile NL will have pro-forma revenues in excess of EUR 2.0 billion and around 4.3 million mobile postpaid subscribers and expects to generate annual run-rate synergies of some EUR 150 million p.a. within three years from closing. These synergies allow for disruptive customer propositions and sustainable investment to maintain network leadership.

Upon closing of the transaction, Tele2 will receive a stake of 25 % and a cash payment of EUR 190 million. Deutsche Telekom will own 75 % of the shares in the enlarged company and a EUR 1.1 billion intercompany loan receivable.

Prior to completion of the transaction, T-Mobile NL will spin out its mobile tower and rooftop assets into a separate legal entity which will remain in the full ownership of Deutsche Telekom.

The transaction, which is still subject to approval by the relevant competition authorities, is expected to close in the second half of 2018.

Credit Suisse and J.P. Morgan acted as financial advisors and De Brauw as legal advisor to Deutsche Telekom.