Telekom Austria’s (VIE: TKA) Bulgarian unit Mobiltel has agreed to buy the country’s second largest fixed-line operator Blizoo from Swedish private equity firm EQT Partners.
The purchase price was not disclosed, but Telekom Austria, in which…
Telekom Austria’s (VIE: TKA) Bulgarian unit Mobiltel has agreed to buy the country’s second largest fixed-line operator Blizoo from Swedish private equity firm EQT Partners.
The purchase price was not disclosed, but Telekom Austria, in which Carlos Slim’s America Movil (BMV:AMX) is the largest shareholder, said it would fund the acquisition via its existing cash flow.
The Austrian incumbent bought Blizoo’s Macedonian business from EQT in June last year, again for an undisclosed sum, as part of its convergence strategy.
Blizoo generated revenues of €47m and EBITDA of €19m in 2014, the Vienna-based telco said.
Telekom Austria’s newly-appointed CEO Alejandro Plater said the takeover is aimed at further developing its business in the “challenging” Bulgarian market.
“We see a huge growth potential together with Mobiltel in the strongly rising fixed-line segment, which will be ultimately beneficial for our Bulgarian customers.”
As well as being the number two player in Bulgaria’s fixed-line space, Blizoo has an 8% share of the fixed broadband market and 11% of the pay TV market, according to Telekom Austria estimates. It covers 1.3 million households in total.
The deal is expected to close in Q4 this year subject to merger control clearance.
Mobiltel posted revenues of €173.6m for the first half of 2015, down 5% year-on-year, and EBITDA of €66.8m, down 11.8% year-on-year. Telekom Austria said the unit continued to be affected by the weak macroeconomic climate and fierce competition in the mobile market.
Telekom Austria is pursuing a convergence strategy across its Central and European markets which, in addition to its home market, Bulgaria and Macedonia, include Belarus, Croatia, Slovenia, Serbia and Liechtenstein. In terms of M&A, it has said its primary focus is on in-market consolidation, however it will also look at expanding into new markets.
Telekom Austria is reportedly vying with Deutsche Telekom for a majority stake in Telekom Srbija.
