Telenor beats Turk Telecom to Bulgaria's Globul

By bne IntelliNews April 29, 2013

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Telenor has agreed a deal to acquire Bulgaria's second-largest mobile operator Globul, the Norwegian telecom operator announced on April 26, beating off competition from Turk Telecom.

An emerging Europe specialist, which has operations in neighbouring Hungary, Serbia and Montenegro, Telenor said it has agreed to pay Greece's OTE €717m for the company on a a cash- and debt-free basis. The deal, which will also see the Norwegian's take control of phone retailer Germanos Bulgaria, is expected to close in the third quarter.

"The purchase price will be adjusted depending on Globul's net debt and changes in working capital on the day the transaction is completed," OTE said in a bourse filing.

The Greek company announced plans to sell Cosmo Bulgaria Mobile EAD - which trades as Globul - last year, as part of its efforts to refinance €1.65bn. However, the sale has been on and off. An original offer deadline in March was extended, while OTE's CEO suggested in early April that the divestment could be pulled after his company raised debt and sold other assets.

Telenor was reported to be competing with interest from landline operator Turk Telekom, mobile operator Turkcell and Deutsche Telekom, in the latest deal in a shifting Bulgarian market. The country's third largest mobile - Vivacom - was recently acquired by a Bulgarian banker in partnership with Russian state-controlled VTB Bank. Globul, with a market share of 36%, is considered to be the second biggest mobile operator - Globul and Germanos posted revenues of €378m - while top player Mobiltel is owned by Telekom Austria.

By April 25, it was reported that Telenor and Turk Telekom were the final pair fighting it out to make the deal, as the Turkish company announced to the Istanbul stock exchange it had placed binding bids for Cosmo Mobile and Germanos, reports Novinite.

Telenor says its first step into the Bulgarian market will help it exploit cross-border synergies, as well as enable the group to expand mobile data and Internet-based services in Bulgaria.

"Based on our experience in Telenor's well-performing operations in the region, we strongly believe that we will be able to create value in the Bulgarian market. By contributing with our scale and experience to Globul's competence and market knowledge, we can offer even better quality and more advanced services to Bulgarian customers," said CEO Jon Fredrik Baksaas in a statement.

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