Ad-hoc | 20 March 2011 19:39
Deutsche Telekom AG / Key word(s): Disposal
20.03.2011 19:39
Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted
by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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Deutsche Telekom and AT&T today announce that AT&T will buy T-
Mobile USA, an affiliate of Deutsche Telekom, for 39 billion
US-Dollar. This has been agreed by the boards of the two
companies today. Deutsche Telekom will receive 25 billion US-
Dollar in cash and 14 billion US-Dollar in shares of AT&T.
AT&T has the right to increase the portion of the purchase
price paid in cash by up to 4.2 billion US-Dollar with a
corresponding reduction in the stock component. With an
interest in AT&T of up to 8 percent (based on current stock
price) Deutsche Telekom will become the biggest minority
shareholder in the leading US-company of the
telecommunications' industry.
The value of the transaction is approximately 28 billion Euro,
whereof approximately 18 billion Euro are in cash and
approximately 10 billion Euro in stock (based on current
exchange rates). Thus T-Mobile is valued at seven times the
adjusted EBITDA of the business year 2010 in this transaction.
After the closing of the transaction Deutsche Telekom plans to
use approximately 13 billion Euro of the proceeds to reduce
its debts. Approximately 5 billion Euro are planned to be used
for share buybacks after closing and required resolutions in
accordance with the legal requirements. For Deutsche Telekom
this transaction leads to a further consolidation of the
balance sheet. Pro forma the ratio for net debt to adjusted
EBITDA in 2010 would have fallen to 1.9x from 2.2x.
There will be no change regarding shareholder remuneration
policy which has been set for 2010-2012. We will continue to
pay out 3.4 billion Euros, on an annual basis consisting of a
minimum dividend of 70 Euro-Cents plus share-buybacks in
accordance with the legal requirements. The planned share-
buybacks of approximately 5 billion Euro after closing the
transaction are to be seen in addition to this.
The guidance for 2011 remains unchanged. For the financial
year 2011 Deutsche Telekom expects an adjusted EBITDA
of around 19.1 billion Euro. The free cash flow is expected to
be stable to slightly growing from the 2010 level of 6.5
billion Euro.
(The guidance is based on the assumption of constant
currencies compared with the average exchange rates of 2010.
The guidance for the free cash flow is excluding EUR0.4 billion
cash settlement for PTC in Q1 2011. The annual dividend/
shareholder remuneration is subject to necessary AGM-
approval and board resolution.)
The agreement between the two companies includes as well that
Deutsche Telekom is to receive one seat on the board of AT&T.
The merger still needs to be approved by both, the US
Department of Justice (DoJ) and the US regulation authority
Federal Communications Commission (FCC). The closing of the
transaction is expected to take place in the first six months
of 2012.
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Information and Explaination of the Issuer to this News:
Disclaimer
This ad hoc release contains forward-looking statements that
reflect the current views of Deutsche Telekom management with
respect to future events. These also include statements on
market potential, statements on finance guidance, as well as
on the dividend outlook. They are generally identified by the
terms 'expect,' 'anticipate,' 'believe,' 'intend,' 'estimate,'
'aim for,' 'goal,' 'plan,' 'will,' 'strive for,' 'outlook,' or
similar expressions and often include information that relates
to net revenue expectations or targets for adjusted EBITDA,
profit or loss, earnings performance, and other indicators, as
well as personnel-related measures and workforce adjustments.
Forward-looking statements are based on current plans,
estimates, and projections. They should therefore be
considered with caution. Such statements are subject to risks
and uncertainties, most of which are difficult to predict and
are generally beyond Deutsche Telekom's control, including
those described in the sections 'Forward-Looking Statements'
and 'Risk Factors' of the Company's Form 20-F annual report
filed with the U.S. Securities and Exchange Commission. Among
the relevant factors are the progress of Deutsche Telekom's
workforce reduction initiative, the restructuring of operating
activities in Germany, and the impact of other significant
strategic or business initiatives, including acquisitions,
dispositions, business combinations, and cost reduction
measures. In addition, regulatory decisions, stronger than
expected competition, technological change, litigation, and
regulatory developments, among other factors, may have a
material adverse effect on costs and revenue development.
Furthermore, changes in the economic and business environments
- for example, the current economic slump - in markets where
we, our subsidiaries, and affiliates operate, the enduring
instability and volatility on the global financial markets, as
well as exchange rate and interest rate fluctuations can also
adversely affect our business development and the availability
of capital at favorable terms. If these or other risks and
uncertainties materialize, or if the assumptions underlying
any of these statements prove incorrect, Deutsche Telekom's
actual results may be materially different from those
expressed or implied by such statements. Deutsche Telekom can
offer no assurance that its expectations or targets will be
met. Deutsche Telekom does not assume any obligation to update
forward-looking statements to take new information or future
events into account or otherwise. Deutsche Telekom does not
reconcile its adjusted EBITDA guidance to a GAAP measure
because it would require unreasonable effort to do so. As a
rule, Deutsche Telekom does not predict the net effect of
future special factors due to their uncertainty. Special
factors and interest, taxes, depreciation and amortization
(including impairment losses) can have a significant effect on
Deutsche Telekom's results.
In addition to figures prepared in accordance with IFRS,
Deutsche Telekom presents non-GAAP financial performance
measures, including EBITDA, EBITDA margin, adjusted EBITDA,
adjusted EBITDA margin, adjusted EBT, adjusted net profit,
free cash flow, gross debt, and net debt. These non-GAAP
measures should be considered in addition to, but not as a
substitute for, the information prepared in accordance with
IFRS. Non-GAAP financial performance measures are not subject
to IFRS or any other generally accepted accounting principles.
Other companies may define these terms in different ways.
20.03.2011 DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de
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Language: English
Company: Deutsche Telekom AG
Friedrich Ebert Allee 140
53113 Bonn
Deutschland
Phone: +49 (0)228 181-88880
Fax: +49 (0)228 181-88899
E-mail: investor.relations@telekom.de
Internet: www.telekom.com
ISIN: DE0005557508
WKN: 555750
Indices: DAX, EURO STOXX 50
Listed: Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime
Standard), Hamburg, Hannover, München, Stuttgart; Terminbörse
EUREX; Amsterdam, London, NYSE, Tokyo
End of Announcement DGAP News-Service
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