LONDON-Global wireless carrier Vodafone Group plc said it reached agreements with Telesystem International Wireless Inc. of Canada to acquire about 79 percent of Romania’s MobiFon S.A., increasing its ownership to 99 percent, and 100 percent of Oskar Mobil in the Czech Republic for $3.5 billion.
Vodafone and TIW confirmed last week they were in talks regarding the sale of the two carriers. Vodafone previously held a 20-percent stake in MobiFon.
Vodafone said the transaction would be satisfied from its cash resources, and it would assume about $9 million of net debt. Vodafone said the transaction will enhance adjusted earnings per share before acquired intangible amortization and synergies, will not impact Vodafone’s share purchase program, and is not expected to affect Vodafone’s credit ratings.
The deal must be approved by TIW shareholders. Certain TIW shareholders-certain affiliates of J.P. Morgan Partners L.L.C., Caisse de depot et placement du Quebec, and AIG Emerging Europe Infrastructure Fund L.P., which collectively own 33.6 percent of TIW-have entered agreements to vote in favor of the transaction, Vodafone said.
The transaction is expected to be completed in the third quarter. A termination fee of $110 million will be payable to Vodafone Group by TIW if the TIW board withdraws or adversely modifies its recommendation of the transaction.
“I am delighted that MobiFon and Oskar, both fast growing mobile operators, will become part of Vodafone, where they will benefit fully from the global services and scale benefits that our group can deliver. These acquisitions will create value for our shareholders and will be good for our customers. They are also consistent with our stated strategy of increasing investment in Central and Eastern Europe,” commented Arun Sarin, chief executive of Vodafone.
Vodafone said Romania has a 47-percent mobile penetration. MobiFon has 4.9 million customers or 48-percent market share. Oskar has 17-percent market share in the Czech Republic, Vodafone said.
