Numerous advantages for the Telekom Austria Group

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América Móvil — present in 18 countries in the Americas

América Móvil — present in 18 countries in the Americas (graphic)

The intensified involvement of América Móvil is advantageous for the Telekom Austria Group in many respects. The global orientation makes the new partnership highly attractive and contributes to ensuring competitiveness. A stable shareholder structure with two core shareholders is particularly beneficial in an increasingly competitive environment with global companies — especially in the light of an anticipated consolidation phase.

The Telekom Austria Group can now also draw on América Móvil’s multinational experience for the development of its telecommunications services. In turn, Telekom Austria Group’s strength lies in its extensive experience in a rapidly changing European market. By bundling innovation and knowledge both sides will benefit. The exploitation of all areas for potential partnerships between América Móvil and Telekom Austria Group and the potential for leveraging synergies are further advantages. As there is currently no geographical overlap between the markets in which América Móvil and the Telekom Austria Group operate, the two companies complement each other well.

Respecting the identity of the Telekom Austria Group

The conditions of the takeover offer, which were agreed as part of an ‘Austrian package’, include the preservation of the Telekom Austria Group’s independent identity. Brands and the service profile will be retained, the headquarters and therefore the major management functions as well as research and development will remain in Vienna. Against this backdrop, the Management Board of the Telekom Austria Group confirmed in relation to the takeover offer that ‘from a current perspective, there will be no significant impact on Telekom Austria’s employment or location situation.’

The Telekom Austria Group is to remain a leading telecommunications service provider with regard to quality, technology and innovation in its markets. The shared goal of América Móvil and ÖIAG is to raise the performance of the Telekom Austria Group while accounting for the interests of all stakeholders. América Móvil recognises all employment and constitutional regulations concerning the Austrian employees and has also pledged to comply with the specific provisions and agreements to safeguard public interests which the Telekom Austria Group is subject to.

A survey carried out by economic research institute ‘Economica’ underpinned the importance of the ‘Austrian Package’, and in particular that the headquarters function remains in Austria, which is specified in the shareholders’ agreement. The analysis regarding economic and regional effects of the headquarters in Austria has shown that the value generation amounted to approx. EUR 700 mn in the year 2013. In addition to the negative impact on the labour market, a loss of the headquarters function could also result in the loss of taxation rights in Austria.

Strategic partner for future growth

América Móvil plans to examine further expansion opportunities. In an increasingly competitive market environment, América Móvil thus strengthens the competitiveness of the Telekom Austria Group. As a result, CEO Hannes Ametsreiter sees América Móvil as ‘a strategic owner, which as an important, globally active telecommunications group can strengthen Telekom Austria in its strategic alignment in the highly competitive European market.’

Alongside ÖIAG the Telekom Austria Group now has a new strategic majority shareholder that supports the path embarked on as well as further growth. With regard to the shareholders’ agreement with ÖIAG, Daniel Hajj, CEO of América Móvil, also makes it clear that ‘this agreement provides the basis for future growth, continued innovation, and solid investment in Telekom Austria.’

Capital increase strengthens capital structure and liquidity

As an important contribution to the further strategic development, core shareholders América Móvil and ÖIAG supported a capital increase of the Telekom Austria Group. This was successfully carried out in November 2014 and brought in net proceeds of approximately EUR 1 bn. Firstly, this will strengthen the balance sheet and secure the investment-grade rating by reducing debt. Secondly, an additional EUR 400 mn is to be invested in accelerating the fibre rollout in Austria, subject to annual budget approvals and the government implementing the announced broadband subsidy programme. In addition, flexibility was created for value-enhancing M&A activities.

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