Orange Group has signed a deal to acquire a 54% controlling stake in fixed operator Telekom Romania Communications from Greek telco OTE. The France-based group will pay a total of EUR268 million (USD318.2 million), on a debt-free, cash-free basis and subject to customary adjustments at closing, corresponding to a total enterprise value of EUR497 million, based on 100% of Telekom Romania Communications and its fixed-mobile convergent subscribers. The transaction is subject to regulatory approvals and other conditions and is expected to be completed within the second half of 2021. The Romanian state will retain its 46% stake in the domestic operator following completion of the acquisition.
Telekom Romania Communications is Romania’s second largest player in fixed telecoms with revenues of EUR622 million reported in 2019. Through its owned fixed network infrastructure, the telco serves approximately 960,000 broadband customers and 1.2 million TV subscribers, while its 90,000km fibre network connects some three million households. It also provides convergent services to approximately 881,000 fixed-mobile convergent subscribers as at 30 June 2020 through an MVNO contract with Telekom Romania Mobile. These customers will migrate to Orange Romania’s network, following the completion of the transaction.
Orange Romania CEO Liudmila Climoc commented: ‘This is a significant milestone for the Romanian telecom market that will enhance its attractiveness both in terms of converged telecoms services and high quality infrastructure, while increasing competition. It will provide the opportunity to scale up innovative convergent services, bringing broader benefits and wider choices to the customers and also to the country’s digital economy sustainable development. Orange Romania’s and Telekom Romania Communications’ network complementarity will allow us to bring together not only customers and teams, but also the best of expertise in terms of quality of service and future-proof mobile and fixed networks infrastructure.’
OTE stressed it will retain ownership of mobile network operator Telekom Romania Mobile Communications following the transaction, although it has reportedly been exploring a potential sale of its holding for some time. The Greek telco currently controls a 70% stake, while the remainder is held by Telekom Romania Communications and the Romania government.