Deutsche Telekom’s largest shareholder, the German government, is reported to be examining the possibility of selling some of its shares in the incumbent.
Germany owns 31.7% of Deutsche Telekom – 14.3% directly and 17.4% through state bank KfW –…
Deutsche Telekom’s largest shareholder, the German government, is reported to be examining the possibility of selling some of its shares in the incumbent.
Germany owns 31.7% of Deutsche Telekom – 14.3% directly and 17.4% through state bank KfW – but is considering reducing its interest to raise cash as it strives to balance its budget next year, according to a finance ministry document seen by Reuters.
Shares in the telco rose 2.28% today following the report. Based on its current stock price, Germany’s stake in Deutsche Telekom is worth in the region of €17.5bn (US$21.7bn).
The proposal is reportedly due to be approved by Chancellor Angela Merkel on 12 November.
The German finance ministry did not immediately reply to a request for comment.
In May, the vice president of Germany’s federal audit office, Bundesrechnungshof, urged the government to reduce its stake in the operator, arguing that telecoms were no longer a task for the state.
Christian Ahrendt was quoted saying that the telecoms sector already had strong competition and innovation. The state should constantly question whether it is in the public interest to retain holdings in companies and divest them if the answer is no, he noted.
Deutsche Telekom’s 1996 IPO saw the government reduce its stake to 74%. It has since made several divestments. In 2013, an independent advisory commission recommended that the government should look at exiting Deutsche Telekom.
Last week, the Finnish government raised SKr5.04bn (US$686m) by selling a 2.3% stake in local telco TeliaSonera.
Deutsche Telekom sets up VC fund
Meanwhile, Deutsche Telekom today announced plans to invest more in technology through venture capital.
The operator plans to launch a new unit called Deutsche Telekom Capital Partners (DTCP) in the New Year, which will be armed with a €500m fund volume for the next five years.
DTCP will be tasked with investing in German start-ups and making private equity investments “to foster operational cooperation between over-the-top companies and Deutsche Telekom”.
Deutsche Telekom’s existing VC fund, T-Ventures, will no longer invest in new companies but will continue to manage its portfolio of around 100 companies and may make follow-up investments.
Thorsten Langheim, who will be responsible for DTCP at Deutsche Telekom, said: “As a hybrid fund, DTCP combines the strengths of a large corporate group with the speed and expertise of an investment fund.
“We are opening up new opportunities for ourselves to increase the value of our own investments that are not part of our core business in the long term. And our private equity approach will allow us to invest in more mature companies that have to date been outside the reach of a purely venture capital focus.”
