Orange agrees to buy controlling stake in Telekom Romania for €268 million

In an increasingly convergent telco market, Orange Romania has agreed to acquire a controlling stake in leading fixed operator Telekom Romania (TKR).

The deal, which values the business at €497 million, will see the Romanian state continue to own the remaining 46% of the telco. Orange said that it will pay a total of €268m, on a debt-free, cash-free basis, to take up the stake currently owned by OTE.

TKR is Romania’s second largest fixed-line operator with 2019 revenues of €622 million. It serves fixed voice, broadband and pay TV services to five million houses, and owns 90,000km of fibre network which connects three million households.

The operator also provides convergent services to approximately 881 thousand fixed-mobile convergent subscribers,via an MVNO contract with Telekom Romania Mobile. These customers will migrate to Orange Romania’s network, following the completion of the transaction.

Orange said that the combined business “will aim to become the preferred choice of customers for convergent services in the Romanian market both for consumer and business segments.” The deal will also serve Orange by accelerating its convergent operator strategy which will create a fully infrastructure-based convergent operator across B2C, B2B and the ICT markets.

Mari-Noëlle Jégo-Laveissière, Deputy CEO, in charge of Orange in Europe, said: “This acquisition is an important step to accelerate our convergence strategy in Europe. Romania is a key market for Orange and a great success story. This transaction confirms our long term commitment to the Romanian market. We are looking forward to contribute to the development of the telecoms sector through sustained investments in top performing network infrastructures and innovative services.”

Liudmila Climoc, CEO, Orange Romania, said: “This is a significant milestone for the Romanian telecom market that will enhance its attractiveness both in terms of converged telecoms services and high quality infrastructure, while increasing competition. It will provide the opportunity to scale up innovative convergent services, bringing broader benefits and wider choices to the customers and also to the country’s digital economy sustainable development. Orange Romania’s and Telekom Romania Communications’ network complementarity will allow us to bring together not only customers and teams, but also the best of expertise in terms of quality of service and future-proof mobile and fixed networks infrastructure.”

The deal will now go to the European Commission and other relevant authorities for approval, with Orange saying it expects to complete the deal in H2 2021.