America Movil To Vote In Favor Of Telefonica Deutschland's E-Plus Deal - Update

(RTTNews) - German telecom company Telefonica Deutschland Holding AG, a unit of Spanish telecommunication group Telefónica S.A. (TEF, TDE.L), on Monday confirmed that America Movil, S.A. de C.V. (AMX) has irrevocably committed to vote in favor of its acquisition of German mobile telecommunications business E-Plus from Dutch telecom firm Royal KPN NV (KPN, KKPNY.PK, KKPNF.PK).

America Movil, controlled by billionaire Carlos Slim, is the major shareholder of KPN, currently owning 1.27 billion shares or a 29.8 percent stake in the company. America Movil will vote in favor of the deal at the Extraordinary Shareholder Meeting of KPN on October 2. The terms of the deal will remain unchanged. The companies continue to expect the transaction to close in the middle of 2014.

It was on July 23 that Telefónica Deutschland agreed to acquire E-Plus from KPN for 3.7 billion euros in cash and an initial stake of 24.9 percent in Telefónica Deutschland. Following the acquisition, E-Plus will become a wholly-owned subsidiary of Telefónica Deutschland.

In the second part of the transaction, for an aggregate consideration of 1.3 billion euros, Telefónica S.A., the parent company, will acquire 4.4 percent of Telefonica Deutschland from KPN, compared to previous agreement of 7.3 percent. Telefónica S.A. will also enter into a call option agreement with KPN that will entitle it to acquire from KPN an additional stake of up to 2.9 percent in Telefonica Deutschland. Such right is being exercisable one year after such call option agreement at a strike price of up to 510 million euros, the company noted.

At the closing of the transaction, KPN will now hold 20.5 percent stake in Telefonica Deutschland, compared to previous agreement of 17.6 percent. In case of full exercise of the call option, the stake will amount to 17.6 percent.

Telefónica Deutschland noted that the execution of the deal continues to require the approval of the general meeting of KPN and Telefónica Deutschland. It is also subject to authority approvals and other customary closing conditions.

Telefonica Deutschland earlier had noted that it expects significant synergy potential from the deal, with total value of synergies expecting to be 5.0 billion euros to 5.5 billion euros net of integration costs.

On Frankfurt's Xetra, Telefonica Deutschland shares closed Friday's trading at 5.074 euros, down 0.045 euros or 0.88 percent.

In Amsterdam, KPN shares closed trading at 2.262 euros on Friday, up 0.31 percent.