Log in
Forgot password ?
Become a member for free
Sign up
Dynamic quotes

school135perm Homepage > Equities > Xetra > Deutsche Telekom DTE DE0005557508

Mes dernières consult.
Most popular
News SummaryMost relevantAll newsSector newsTweets

Deutsche Telekom buys Austrian cable unit from Liberty Global

12/22/2017 | 01:56pm CET
Deutsche Telekom logo is seen during preparations at the CeBit computer fair in Hanover

Deutsche Telekom (>> Deutsche Telekom) is buying Austrian cable provider UPC from Liberty Global (>> Liberty Global PLC) for 1.9 billion euros (£1.68 billion) including debt as it adds broadband services to countries where it only offers mobile operations.

Deutsche Telekom (>> Deutsche Telekom) is buying Austrian cable provider UPC from Liberty Global (>> Liberty Global PLC) for 1.9 billion euros (£1.68 billion) including debt as it adds broadband services to countries where it only offers mobile operations.

For Liberty Global, the sale is seen as part of efforts to reorganise its operations in the event that merger negotiations with Vodafone (>> Vodafone Group) resume.

With the acquisition, Deutsche Telekom is hoping to challenge the dominance of local incumbent Telekom Austria (>> Telekom Austria AG), which has around 1.5 million fixed-line broadband subscribers, compared to roughly 500,000 for UPC Austria.

The deal comes days after Deutsche Telekom expanded its fixed-line footprint in the Netherlands and signed a letter of intent for Poland. It also comes in the wake of its failure to merge its T-Mobile U.S. (>> T-Mobile US) operations with Sprint in autumn.

Deutsche Telekom, which generates two thirds of its sales outside Germany, will be left with mobile only operations in its largest single market, the U.S., as well as in small countries such and Albania, if the recently struck deals come to fruition.

For their part, Liberty and Vodafone have talked about combining forces as telecoms networks and services converge but have so far only announced a joint venture in the Netherlands.

Vodafone is currently spending 2 billion euros on building out its fixed line network in Germany, but it said in November the investment did not preclude a Liberty deal.

With Brexit only 15 months away, UK authorities are expected to play a larger role in merger control, implying that Vodafone and Liberty will pursue two separate transactions, one for Germany, Netherlands and Eastern Europe and one for the UK and Ireland, analysts from Bernstein said.

"That this (Deutsche Telekom-Liberty) transaction is a prerequisite or a catalyst for the still elusive mother or father of all cable/mobile deals is thoroughly premature in our view," they said.

Vodafone, which does not have its own network in Austria, and Liberty Global declined to comment on merger speculation.


Liberty said it plans to use the proceeds from the sale to reduce debt of the remaining UPC group, which is focused on Eastern Europe and Switzerland, as well as to finance Liberty's share buybacks.

The deal values UPC Austria at about 10 times its estimated 2018 earnings before interest, tax, depreciation and amortization.

Pre synergies, it comes at a 10-14 percent premium to European cable valuations, said Bankhaus Lampe analyst Wolfgang Specht. "Not cheap, but given the strategic deadlock Deutsche Telekom has to accept some premium," he said.

The company said the net present value of potential synergies after integration costs amount to 800 million euros.

"The integration of UPC Austria with its own network as well as TV and entertainment offers will make us a strong competitor to the current market leader, A1, and transform T-Mobile Austria into a completely new company," Deutsche Telekom said.

Liberty Global will also provide certain transitional services for a period of up to four years, mainly network and information technology-related functions, and allow T-Mobile Austria to use the UPC brand for up to three years.

The deal is expected to close in the second half of 2018.

LionTree Advisors was the financial adviser to Liberty Global on the deal, while Deutsche Telekom worked with Credit Suisse (>> Credit Suisse Group).

(Additional reporting by Francois Murphy, Paul Sandle, Christoph Steitz, Mekhla Raina and Sangameswaran S; Editing by Gopakumar Warrier and Keith Weir)

By Arno Schuetze

01/08LUFTHANSA : Deutsche Telekom and Lufthansa are making flying smarter; Telekom Fa..
01/08DEUTSCHE TELEKOM : Show us your apps
01/05IBM outlines limitations in Microsoft`s data trustee model
01/04DEUTSCHE TELEKOM : Telekom reports ‘record year’ for fibre expansion..
2017Siemens to gauge interest of state funds in Healthineers IPO - CEO
2017DEUTSCHE TELEKOM : looks to accelerate broadband upgrades in 2018
2017DEUTSCHE TELEKOM : Telekom delivers faster broadband to 60,000 households
2017DEUTSCHE TELEKOM : When DT warns twice
2017DEUTSCHE TELEKOM : Record year for fiber-optic expansion
2017DEUTSCHE TELEKOM : Names Two New Board Members
More news
News from SeekingAlpha
01/02WALL STREET BREAKFAST : What's In The Cards For 2018?
2017My Stock Picks For 2018
2017Liberty Global sells Austrian business to Deutsche Telekom in $2.2B deal
2017FT : Liberty Global near deal to sell Austrian $2B to Deutsche Telekom
2017Deutsche Telekom (DTEGY) & Tele2 To Combine Dutch Units - Slideshow
Financials (€)
Sales 2017 75 084 M
EBIT 2017 9 806 M
Net income 2017 3 583 M
Debt 2017 55 216 M
Yield 2017 4,60%
P/E ratio 2017 19,67
P/E ratio 2018 16,04
EV / Sales 2017 1,65x
EV / Sales 2018 1,61x
Capitalization 68 851 M
Duration : Period :
Deutsche Telekom Technical Analysis Chart | DTE | DE0005557508 | school135perm
Technical analysis trends DEUTSCHE TELEKOM
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 27
Average target price 17,6 €
Spread / Average Target 22%
EPS Revisions
Timotheus Höttges Chief Executive Officer
Ulrich Lehner Chairman-Supervisory Board
Thomas Dannenfeldt Chief Financial Officer
Claudia Nemat Head-Technology & Innovation
Michael Sommer Member-Supervisory Board
Sector and Competitors
1st jan.Capitalization (M$)
TELEFONICA0.91%51 932
ORANGE-0.07%46 939
Copyright © 2018 Surperformance. All rights reserved.