Telefónica to sale of Telefónica Czech Republic to PPF Group for 2,467 million euros

V&D Bureau
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Telefónica has reached an agreement with PPF Group will sell 65.9% of Telefónica Czech Republic, which includes its operations in Slovakia.


The total cash consideration for the operation is 2,467 million euros, with 2,063 million euros in cash payable upon completion of the transaction and a deferred payment of 404 million euros over a period of four years. Before transferring the shares, Telefónica will receive an additional payment of 260 million euros in November for the dividend declared.

"Although it is expected that PPF will launch a mandatory tender offer for the remaining capital, Telefónica will maintain a stake of 4.9% in Telefónica Czech Republic and will remain as an industrial and commercial partner for a period of four years. Under the terms of the agreement, Telefónica may dispose of its shares subject to certain conditions once the mandatory offer is over," the company mentioned in its statement.

"Telefónica Czech Republic and Telefónica Slovakia will change their company names but will continue to trade under the successful O2 Brand for a maximum of four years. The company will also join Telefónica's Partners Programme, an initiative offering other operators the opportunity to benefit from Telefónica's scale and cooperate on key business areas," it said.

It is anticipated that this transaction will have a positive impact reducing Telefónica Group's net debt by approximately 2,685 million euros which will enable Telefónica to meet its net financial debt guidance by year end.

Telefonica started operating in the Czech Republic in 2005 and founded Telefónica Slovakia in 2007. Telefónica Czech Republic operates the commercial brand O2 in the Czech Republic and Slovakia and has a combined total of 9.3 million mobile, fixed-line and IPTV customers in both territories as of June 2013.