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Deutsche Telekom sells T-Mobile Netherlands for €5.1 billion to private equity

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Deutsche Telekom has divested itself of Dutch asset - also equity swaps with Softbank

T-Mobile Netherlands, currently a distant third among Dutch mobile operators, has been sold by owner Deutsche Telekom (DT) for €5.1 billion euros (£4.38 billion).

The new owner is a consortium of the private equity houses Apax and Warburg Pincus, reports Reuters.

In July it was reported that the DT operator group was working with Morgan Stanley to find a buyer for around €4.5 billion. As information was sent to potential bidders,  it emerged that DT needs funding for a multi-billion euro fibre infrastructure building programme in Germany. DT is already seeking investment from a third party or parties. It also needs funding to capitalise on its option to increase its holding in T-Mobile US –  to more than 50% from 43%.

DT group's debt is €130 billion

Deutsche Telekom bought a controlling interest in the Dutch business from Sweden’s Tele2 in 2018. However, T-Mobile Netherlands was ranked third on the Dutch mobile operator’s market, a long way behind leaders KPN and Vodafone Ziggo. Analysts says it was never considered as one of DT’s strategically important assets.

According to Reuters there had been speculation about a possible sale in recent weeks and India’s Reliance Industries had emerged at one stage as a contender.

Meanwhile Japanese technology and investment company SoftBank Group has taken an equity share swap with Deutsche Telekom AG, giving it 225 million new shares in the German telecom company in exchange for 45 million T-Mobile US shares it held, reports Market Watch, which says that DT intends to acquire another 20 million T-Mobile US shares from SoftBank.

With a 4.5 per cent stake in DT Softbank is now its second-largest private shareholder and intends to have board representation.

Under the strategic partnership, SoftBank portfolio companies will gain access to Deutsche Telekom's customers across Europe and in the US.