Deutsche Telekom shares fall after Austrian cable provider purchase
Deutsche Telekom shares were trading lower, Friday. The telecoms business confirmed it had entered an agreement to buy Liberty Global’s Austrian cable business, UPC Austria, for €1.9 billion.
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News of the deal comes soon after Deutsche Bank analysts set a price target of €18.60 on the stock.
By 1330 BST, Deutsche Telekom shares were 0.20% lower at €15.02. The company’s share price has had a difficult year. Shares moved higher over the first few months before reversing that trend and heading lower than the €16.35 it stood at the start of 2017.
Broader telecoms provision
This latest purchase is part of Deutsche Telekom’s ongoing strategy of increasing its telecoms capabilities and offerings.
“With this acquisition Deutsche Telekom is taking another major step to realize our strategy to become a fully converged operator in our European footprint,” said Deutsche Telekom board member, Srini Gopalan.
“The acquired cable network will be a perfect match with our best mobile network. It will allow customers to benefit from extended scope of services with fixed and mobile offerings from one source. We see a significant potential to accelerate growth in the Austrian market”, Gopalan added.
Deal follows Netherlands tie-up
This latest deal comes soon after Deutsche Telekom announced it would buy Tele2 NL for €190 million and a 25% share in the enlarged company.
The purchase will see Deutsche Telekom increase its fixed line abilities in the Netherlands.
“This is a fantastic opportunity to speed up development of the Dutch telco market and to spur effective competition to the benefit of the Dutch population,” said President and CEO of Tele2 AB, Allison Kirkby.
“I see this as a logical next step to become part of a stronger number three player that will benefit our customers, our shareholders and our employees,” Kirkby added.
Deutsche Telekom has also signed a letter of intent for Poland.