Blackstone to acquire 4.5% of Deutsche Telekom

The New York-based LBO giant is to pay €2.68bn to buy a minority stake in Germany’s largest telecoms group.

US private equity firm The Blackstone Group has signed an agreement to acquire 4.5 percent of the registered share capital of European telecoms business Deutsche Telekom.

German state-owned development bank Kreditanstalt fuer Wiederaufbau (KfW) said it has agreed to sell 191.7 million shares in Deutsche Telekom to Blackstone at a price of €14 each, representing a purchase price of €2.68 billion ($3.31 billion).

KfW said the offer price represents a 2.6 percent premium to Deutsche Telekom’s closing price on Friday of €13.65 on the Frankfurt Stock Exchange.

Blackstone also agreed to a two-year lock-up period regarding ownership of the shares.

The New York-based private equity firm was advised by Deutsche Bank on the transaction.

The transaction will see KfW reduce its stake in Deutsche Telekom to 17.3 percent, while the German federal government holds 15.2 percent. The two parties are Deutsche Telekom’s largest shareholders.

According to a Reuters report, Blackstone’s move has been welcome by German finance minister Peer Steinbrueck as a vote of confidence in Deutsche Telekom from international investors.

Established in 1987, Blackstone has managed more than $14 billion through its funds. According to the firm, it has made investments in Germany with an aggregate value of over €13 billion.