Telenor Group has announced plans to acquire Bulgaria’s second-largest mobile operator Globul for €717 million, with the deal expected to close in Q3 this year.
Globul is owned by Greek telecoms company OTE and has a market share of approximately 37 per cent (4.6 million connections), according to Wireless Intelligence. The deal will also see Telenor take control of Germanos Bulgaria, a major telecom retailer in the country.
In 2012, Globul and Germanos Bulgaria generated revenues of €378 million and EBITDA of €135 million. Globul has been operating in Bulgaria since 2001 and trails market leader M-Tel, owned by Telekom Austria, which controls 45 per cent of the Bulgarian mobile market.
The Nordic-headquartered operator group claims the acquisition will be a good fit with its other operations in central and eastern Europe (where it is present in Hungary, Serbia and Montenegro).
“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 Jon Fredrik Baksaas, president and CEO of the Telenor Group, in a prepared statement.
For OTE, the sale offers it the opportunity to reduce debt and allow it to focus on client retention amid Greece’s crippling recession. The Telenor deal will cut OTE’s debt by half from early-2011 levels of more than €4 billion. “Going forward, we can now focus on fully meeting our customers’ needs by developing next-generation networks, as well as new products and services,” chief executive Michael Tsamaz said in a bourse filing.