Telekom Austria sweetens offer for Telekom Srbija

5 May 2011

Telekom Austria Group has confirmed it has submitted a revised conditional bid for the acquisition of a 51% stake in Telekom Srbija – the incumbent operator of the Republic of Serbia – worth EUR1.1 billion (USD1.63 million). Back in March the Austrian firm made an initial conditional offer of EUR800 – EUR950 million and the commitment to invest a total of EUR450 million over a three-year period. The initial offer was conditional upon merger control clearance in Serbia, resulting in consolidation of the market. Moreover, a further key condition was the agreement to address Telekom Srbija’s cost structure within a pre-agreed time frame. These conditions also apply to the revised bid.

According to a statement by Telekom Austria, in the course of the negotiations currently underway with the Serbian Ministry of Finance, additional ‘value-enhancing’ elements have been identified. These include spectrum agreements and the extension of telecoms licences, which remain subject to prior approval by the relevant authorities. Taking into consideration these new elements, and waiving the initial CAPEX commitment, the revised offer encompasses the following elements: a cash payment totalling EUR800 million due at the closing of the transaction; and deferred annual cash payments which will take place over a period of nine years after the closing of the transaction.

Serbia,A1 Telekom Austria Group, Telekom Srbija (MTS),



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