KPN, subject to a €7.2 billion takeover bid from Carlos Slim’s America Movil, today announced an agreement with Dutch authorities to book a loss of €3.7 billion on the assumption it completes the sale of its E-Plus German business to Telefonica.
The loss will offset the Dutch operator’s taxable income, starting in 2014, and so perhaps make KPN a more attractive target for the Mexican tycoon.
In a complex three-way saga, America Móvil, which already owns 30 per cent of KPN, is in talks to acquire the remaining equity but has faced resistance from the KPN Foundation.
Telefonica, meanwhile, recently bumped up its offer for E-Plus after America Movil threatened to block the deal going ahead at the lower price.
Eelco Blok, KPN’s chief executive, quoted by the Financial Times, was unsurprisingly upbeat about the tax deal.
“Having reached an agreement with the Dutch tax authorities gives certainty about our tax position for the coming years,” he said. “It is another important step for KPN to continue to invest in its operations and the latest technologies in the Netherlands.”
According to a Bloomberg source, America Movil plans to formally file its offer for KPN as soon as this week, when it also expects to get regulatory approval.
As well as the KPN Foundation, however, America Movil will also have to satisfy the Dutch government that a takeover by a foreign company would not have any adverse implications for national security.
On Thursday (12 September), Henk Kamp, the Dutch minister of economic affairs, sent a letter to parliament saying the government will seek additional binding agreements that guarantee the public interests in a change of KPN ownership.
Kamp referred to the importance of KPN’s infrastructure and emergency service communication systems, as well as KPN services used by government institutions.
While in principle these interests are safeguarded by current regulation, said the government minister, he would conduct a study to see if the measures in place were adequate or could be improved.