Orange poised to acquire Telekom Romania stake from OTE

Orange poised to acquire Telekom Romania stake from OTE

26 September 2019 | Alan Burkitt-Gray

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Orange and Deutsche Telekom are waiting on the Romanian government to decide the future of the fixed-line operations of Telekom Romania.

Deutsche Telekom controls the business, formerly Romtelecom, through its controlling stake in OTE of Greece. It wants to sell the unit to Orange, but both companies need the approval of the Romanian government, which owns 46%.

According to local media Hotnews.ro, the Orange/Deutsche Telekom discussions concern OTE’s 54%, but the government has first refusal. The government has not yet decided, say local reports.

The minister of communications, Alexandru Petrescu, held a first meeting yesterday of an inter-ministerial group of key ministries to deliberate on their strategy. Deutsche Telekom board member Srini Gopalan met minister of communications Petrescu in Bucharest earlier this month to discuss the plan, but, contrary to reports at the time, approval has not yet been reached

Orange already owns the largest mobile network in Romania and is a broadband service provider. Orange Romania is running a competition (pictured) for start-ups under the title “do you believe in unicorns?”.

According to Hotnews.ro, the government will decide between three options – to retain its 46% stake, to buy out OTE/Deutsche Telekom’s 54% stake, or to sell its stake to Orange at the same time as OTE sells its stake.

Meanwhile, south of the Danube in Bulgaria, financial newsletter Capital reports that the owner of Vivacom has received three expressions of interest for the company. Reports say private-equity investors BC Partners and Providence Equity are the front runners and are expected to submit bids by the middle of October.

Spas Roussev, the owner of a majority stake in Vivacom, put the business up for sale earlier this year via investment bank Lazard at a price believed to be €1.2 billion.