Telefónica, through its subsidiary Telefónica Local Services GmbH, has initiated a strategic move to consolidate its operations in key markets including Germany. The company has offered to acquire the remaining 28.19% of shares in Telefónica Deutschland not currently under its ownership. The voluntary public acquisition offer is set at €2.35 per share, which represents a significant premium over recent Frankfurt Stock Exchange prices.
The Spanish telecom giant currently owns 71.8% of the German unit directly or indirectly and holds rights for an additional 1.32%. This acquisition aims to enhance Telefónica's presence in its core geographies, including Spain, Brazil, Germany, and the UK. The offer period is anticipated to run from December 2023 to mid-January 2024.
In addition to this acquisition, Telefónica also plans to reevaluate Telefónica Deutschland’s dividend policy according to business needs and investment plans. The future dividend policy will reflect the needs arising from the implementation of its current business plan, future spending and investment plans, as well as other existing or potential risks and contingencies. This includes a confirmed €0.18 dividend per share for the financial year 2023, expected to be paid out in 2024.
The acquisition offer, which does not have a minimum acceptance threshold, is pending approval from the German Federal Financial Supervisory Authority. Bank of America (NYSE:BAC) and J.P. Morgan are acting as financial advisors to Telefónica on this transaction. Legal counsel is being provided by Gleiss Lutz, Davis Polk & Wardwell LLP, and Uría Menéndez.
This move follows Telefónica's introduction of a commercial mobile 5G mmWave network at MWC 2023 in Spain with Ericsson (BS:ERICAs) and Qualcomm (NASDAQ:QCOM) Technologies. Telefónica is one of the world's largest telecommunications service providers with operations in Europe and Latin America. Telefónica Deutschland is a leading integrated telecommunications provider in Germany.
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