Telenor has agreed to buy Bulgaria’s second-largest mobile operator Globul from OTE for €717m (US$939m) on a cash and debt free basis.
The transaction includes the acquisition of telecoms retailer Germanos, which is operationally integrated with…
Telenor has agreed to buy Bulgaria’s second-largest mobile operator Globul from OTE for €717m (US$939m) on a cash and debt free basis.
The transaction includes the acquisition of telecoms retailer Germanos, which is operationally integrated with Globul.
With this acquisition, Telenor is foraying further into the Central and Eastern European market. The Norwegian company already operates in Serbia, Hungary and Montenegro.
“Our entrance into the Bulgarian market enhances the potential for cross-border co-operation and increased efficiency that our customers, businesses and the Telenor Group as a whole will benefit from,” said EVP and head of Europe Kjell-Morten Johnsen, in a statement. “We also see a potential in expansion of mobile data and internet-based services in the market.”
Las week, Telenor acquired a banking licence in Serbia and it is also bidding for a mobile licence in Myanmar.
The sale of Globul will allow Greece’s OTE to reduce its debt. The company first announced its intention to sell the Bulgarian unit in June last year as part of comprehensive plans to tackle debt.
The telco has since sold local satellite unit Hellas Sat for €208m and raised €700m in a bond issue.
Turk Telekom had been among the bidders to acquire the Bulgarian operator, having placed a binding offer on 18 April.
According to OTE, Globul’s price tag reflects a 6x 2013E EBITDA multiple. Globul, which has 36% market share, generated €378m in revenues and EBITDA of €135m at the end of 2012.
“The agreed price improves OTE’s value to the benefit of all shareholders in particularly difficult and turbulent period,” noted OTE CEO Michael Tsamaz in a separate statement.
“It further reduces OTE Group’s debt and ensures long-term sustainability, regardless of the macroeconomic environment. Since early 2011 and following the receipt of the transaction proceeds, we will have more than halved our net debt, reducing it by €2.3bn.”
OTE hired Citigroup as financial adviser on the transaction, which is expected to close by late June, subject to regulatory approvals.
