KPN shareholders approve E-Plus sale to Telefonica
A majority of KPN shareholders on Wednesday approved the sale of the company's German mobile operator, E-Plus, to Telefonica Deutschland.
However, a shareholder group known as the KPN Foundation, which represents almost half of all KPN shares and has in the past expressed skepticism about the takeover, abstained from the vote.
Nonetheless, the approval does pave the way for the deal, effectively a merger of E-Plus with Telefonica's German O2 brand, to go ahead. Telefonica announced the planned takeover in July, at an initial value of around €8.1bn, but in August upped the price to €8.55bn to secure buy-in from América Móvil, KPN's largest shareholder. América Móvil is controlled by Mexican business mogul Carlos Slim.
A merger of O2 and E-Plus would create one of Germany's largest mobile networks, with a customer base rivaling those of competitors Deutsche Telekom and Vodafone.
Even though the sale is likely to proceed, negotiations — presumably about the deal's value and governance of the new entity — are still underway.
Neither KPN's board nor its management has given an official thumbs-up on the proposed merger, and last week, América Móvil announced that the takeover, which was initially slated to go through in September, will not now begin until sometime in October.
On Wednesday, E-Plus announced that it expects the deal to be finalised in mid-2014, and promised customers that after the merger "nothing will change".
Assuming the deal does proceed, it will still need to get approval from Europe's competition regulators.
In September, Joaquín Almunia, the vice president of the European Commission for competition policy, announced in a speech that the merger will be reviewed at an EU level, as part of a new "telecoms package".
The announcement effectively pre-empted any potential review at the national level by the Bundeskartellamt, Germany's competition regulator. Andreas Mundt, the Bundeskartellamt's president, has expressed concern over the merger narrowing the telecom market from four major providers down to three.