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Deutsche Telekom’s OTE sells Romanian fixed unit to Orange for €268m

Liudmila Climoc Orange.jpg

Orange has finally succeeded in buying a controlling stake in fixed operator Telekom Romania – formerly Romtelecom – after more than a year of negotiations.

It will pay €268 million to OTE, the Greek operator that owns 54% of the business. But OTE – which is controlled by Deutsche Telekom – will hold on to its mobile unit, Telekom Romania Mobile Communications.

Mari-Noëlle Jégo-Laveissière, Orange’s deputy CEO in charge of Europe outside France, commented: “This acquisition is an important step to accelerate our convergence strategy in Europe. Romania is a key market for Orange and a great success story.”

The acquisition will need approval by the European Commission – Romania is an EU member – and by other regulators.

The deal values the former Romtelecom at an enterprise value of €497 million. The business is Romania’s second largest player in fixed telecoms with revenues of €622 million reported in 2019. Orange Romania reported €1.1 billion revenues in 2019, giving the whole combined unit sales of over €1.7 billion.

The person in charge will be Liudmila Climoc (pictured), who has been CEO of Orange Romania since 2016. She said it was “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”.

Orange said that, thanks to this acquisition, it will accelerate its convergent operator strategy which, when combined with the Romtelecom fixed network, will create a fully infrastructure-based convergent operator.

Climoc said the acquisition “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 has been working on the deal since at least September 2019, when local media in Romania widely reported the sale. The government of Romania seems likely to hold on to the remaining 46%.

Jégo-Laveissière said: “This transaction confirms our long-term commitment to the Romanian market. We are looking forward to contribute to the development of the telecoms sector through sustained investments in top performing network infrastructures and innovative services.”

OTE’s chairman and CEO, Michael Tsamaz, said it was “a strategic decision in the context of OTE group’s redefined priorities and growth plans, in order to support the group’s development and create value for all stakeholders”.

He said OTE “remains in the market through Telekom Romania Mobile”. He added: “The acquisition of the company by Orange Romania ensures its future growth and creates the conditions to further strengthen market competitiveness to the benefit of its customers and to support the digital transformation of the Romanian economy and society.”