Telefonica has sold off a huge chunk of its Czech and Slovakian mobile business.
A Netherlands-based financial group, PFF, is to take 65.9 percent stake in Telefonica Czech Republic, which runs the O2 brand in the country, as well as all Telefonica's Slovakian operations, for CZK 63.6bn (€2.5bn), or CZK 305.60 per share. The company will pay the final tranche of €404m four years after the transaction closes.
PFF will acquire the right to use the O2 brand in the region for the same period, while Telefonica will keep a five percent stake in the business.
PFF will take on O2's five million Czech and 1.4 million Slovakian customers, which brought in revenues of €930m in the first half of the year, down around five percent year on year.
The deal will now be subject to the usual competition scrutiny from the European Commission.
The sale of its Central European operations will allow Telefonica to shave €2.6bn off its debts, a sizeable portion of the €49bn it has recently made efforts to reduce, including by selling off its Irish operations to Three earlier this year.
The operator has also been acquiring of late, buying up E-Plus, a German operator owned by Dutch telco KPN, for €8.55bn.
According to John Delaney, associate VP of mobility research at analysts IDC, the profits from the Czech sale will help the company invest in other regions.
"The proceeds of O2 Czech sale will help Telefonica to go after opportunities in Italy and Latin America, as well as continuing to pay down debt," he wrote.
Telefonica has already increased its involvement in Italy: in September, it announced it had reached an agreement to increase its share of Telco, the holding company which owns 22.4 percent of Telecom Italia.