Telenor acquires GloBul and Germanos

29 Apr 2013

Greek-based Hellenic Telecommunications Organisation (OTE) has signed an agreement with Norwegian telecoms group Telenor to sell Bulgarian mobile operator GloBul and its integrated telecom retailer Germanos for an estimated price of EUR717 million (USD938.7 million) on a cash and debt free basis, in order to reduce its debt. According to Telenor’s press release, the deal is expected to be finalised in the third quarter of 2013, after the completion of all required procedures and attainment of merger control approval from the Bulgarian anti-monopoly regulator Commission for Protection of Competition (CPC). Telenor beat a rival bid for GloBul from Turk Telekom.

According to TeleGeography’s GlobalComms Database, GloBul is the second largest mobile operator in Bulgaria and at the end of 2012 the company had 4.5 million subscribers and a market share of nearly 36%. For the fiscal year ending December 2012, GloBul and Germanos Bulgaria generated total revenues of EUR378 million and EBITDA of EUR135 million.

Telenor is already operating in central and Eastern Europe – in Hungary, Serbia and Montenegro. Kjell-Morten Johnsen, Executive Vice-President and Head of region Europe at Telenor said: ‘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. We also see a potential in expansion of mobile data and internet-based services in the market.’

The deal values GloBul at six times forecast 2013 EBITDA, OTE said in a stock market filing, although the preliminary price will be adjusted depending on GloBul’s net debt and changes in working capital on the day the transaction is completed. OTE added that it will use the proceeds from the GloBul sale to reduce its debt as well as investing in winning back customers from its competitors in Greece. OTE CEO Michael Tsamaz said: ‘Going forward, we can now focus on fully meeting our customers’ needs by developing next-generation networks, as well as new products and services.’ Reuters noted that following completion of the GloBul sale, OTE will have raised EUR1.3 billion from asset sales since January 2012, including the divestment of satellite operator Hellas Sat and a 20% stake in Serbian incumbent Telekom Srbija, helping to slash its debt pile by half, from about EUR4.3 billion in early 2011. Mr Tsamaz stated in a stock market filing that the latest deal ‘reduces OTE group’s debt and ensures long-term sustainability.’ OTE, which has not paid a dividend in two years, has EUR1.6 billion in maturing debt in 2013-2014.

Bulgaria, Cosmote, Telenor Bulgaria, Telenor Group, Turk Telekom