Shareholders of Dutch operator KPN have cleared the sale of E-Plus to Telefonica Germany. Under the terms of the agreed deal, which is subject to regulatory approval, KPN will receive €5 billion in cash and a 20.5 per cent stake in the Spanish giant’s German mobile operations.

KPN said it will use the cash to step up investment in its home market and Belgium. It will also re-commence dividend payments – which were scrapped for 2013 – in the operator’s 2014 financial year.

The combination of E-Plus and Telefonica Germany will create the country’s largest mobile operator by customers.

KPN reckons the deal will be cleared by EU regulators by mid-2014.

Eelco Blok, KPN’s chief executive, reported by Reuters, said he expected to see more industry consolidation to fund spectrum auctions and 4G investment.

KPN shareholder approval to the E-Plus sale comes at a time when the Dutch operator is haggling with Carlos Slim’s America Movil – the biggest shareholder in KPN – over the price of a full takeover.

KPN wants America Movil to raise its proposed €2.40 per share offer (worth €7.2 billion), not least because it has struck an agreement with Dutch authorities to book a loss of €3.7 billion on the assumption it completes the sale of E-Plus. The loss will offset the Dutch operator’s taxable income, starting in 2014, which arguably makes KPN a more attractive target.

On the other hand, reports Reuters, the Mexican group is arguing that the recent entry of Dutch cable operator Ziggo into the mobile market has depressed KPN’s valuation.

KPN Foundation, an independent body with the power to block America Movil’s takeover bid – it has more than 50 per cent voting rights – has so far been resistant to the overtures made by Mexican tycoon Slim.

KPN Foundation abstained at the E-Plus vote by KPN shareholders on 2 October.