(Associated Press via NewsEdge) The Greek government and representatives of Deutsche Telekom have struck a deal on sharing ownership and management control of Greece's largest telecom company, OTE, Finance Minister Giorgos Alogoskoufis said.
Under the deal, the Greek government and Deutsche Telekom would each control 25% plus one share of OTE, while the German operator could also raise its holdings of the Greek company in the future, Alogoskoufis said.
Deutsche Telekom would pay $45.93 a share for a 3% stake in OTE, which will allow the German company to extend its footprint in Central and Eastern Europe and win access to long-coveted markets such as Romania and Bulgaria.
'The Greek government will receive $682.9 million,' Alogoskoufis said.
Deutsche Telekom announced in March the acquisition of a 20% stake in OTE, Greece's former monopoly telecoms operator, for about $3.87 billion, from Marfin Investment Group Holdings SA.
Since then, Deutsche Telekom has been in talks with the Greek government to discuss raising its stake in OTE further, as well as the delicate issue of management control at the company and the final acquisition price.
In a statement, Deutsche Telekom said it would round off its stake by buying an additional 2% of OTE on the market. It said this would bring the total purchase price to about $4.95 billion.
The minister said each party would control five seats on OTE's 10-seat board. Deutsche Telekom will name the CEO, while the Greek state would name the company chairman.
Each will be done only with the prior approval of the other major shareholder.
Both sides will also have the right to reject the other's candidates twice. However, it is likely that the government and Deutsche Telekom would agree on a single common candidate to hold both positions, Alogoskoufis said.
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