KPN grabs the rest of Reggefiber for €610m
Dutch telco KPN has reached an agreement with its joint venture partner Reggeborgh to acquire the remaining 40 percent stake in fibre broadband provider Reggefiber it doesn't currently own.
In late October, KPN announced plans to take over Reggefiber, and was subsequently granted permission by the Dutch telecoms regulator the Authority for Consumers and Markets (ACM) to do so.
However, the ACM said it wanted KPN to grant competitors such as Tele2, Vodafone, and Online access to its copper and fibre-optic networks for the next three years. This would allow consumers more choice in their fixed telecoms providers and let them benefit from faster and cheaper telecommunication services. The ACM stated that if it were not to step in "there would be too little choice: Dutch telecom company KPN and cable company UPC/Ziggo would then dominate the market. In ACM's opinion, having just two providers in these markets cannot be considered healthy competition".
In line with strategy
On 1 November, KPN expanded its stake in Reggefiber, paying €161m for additional shares worth nine percent of the company, taking its total share of the ISP to 60 percent.
KPN said this week it will pay €610m to acquire the remainder of Reggefibre. According to the telco, the acquisition is in line with its strategy of using the proceeds from the sale of its mobile subsidiary E-Plus — sold to Telefonica earlier this year — to increase its financial flexibility and focus on the Netherlands and Belgium. The sale of E-Plus earlier this year was a challenge in its own right, when telecoms billionaire Carlos Slim unsuccessfully tried to acquire KPN in an attempt to block the sale of E-Plus.
Under the deal, KPN will pay back €500m of Reggefiber's debts in the fourth quarter of 2014.
After KPN gained full control of Reggefiber earlier this month, Reggeborgh had the right to sell the remaining 40 percent to KPN at fair value for the next seven years. However, as expected, Reggeborgh opted instead for a quick sale of the remaining stake in the ISP.
Joost Farwerck, a member of the board of directors of KPN, said that KPN will continue to pursue its hybrid network strategy of copper network upgrades alongside fibre to the home rollouts in the Netherlands.