An independent Dutch foundation has expressed concern about the proposed acquisition of KPN by Latin American telecoms giant America Movil, casting doubt over the likelihood of a takeover, reports Reuters.
Owned by Mexican billionaire Carlos Slim, America Movil (Mexico City, Mexico) last week announced plans for a €7.2 billion ($9.56 billion) takeover of the Dutch telecoms incumbent, in which it currently holds a 30% share.
The bid followed news of an €8.1 billion bid for E-Plus, KPN’s (The Hague, Netherlands) German mobile subsidiary, by Telefonica (Madrid, Spain), which is looking to merge the company with its own German operation, and has been seen as a challenge to that move.
Nevertheless, the foundation’s reported statement addresses the uncertainties about the America Movil offer.
“There is considerable uncertainty about America Movil’s intentions, including KPN’s intention to sell its German subsidiary E-Plus,” it is quoted as saying by Reuters.
Indeed, the sale of E-Plus to Telefonica would render KPN a far less attractive investment target, given the size of the German market and the healthy state of its economy in comparison with those of other European countries.
Moreover, E-Plus has been growing its share of the German telecoms market and reported the second-highest number of net customer additions, after incumbent Deutsche Telekom (Bonn, Germany), for the three months ending June.
According to Reuters, Dutch foundations have the power to block hostile takeovers in the Netherlands and are a common feature of the country’s business landscape.
Reuters says the foundation has stated that it was set up “to represent the interests of KPN, its associated entities and its stakeholders, in part by protecting KPN as much as possible from influences that might threaten the continuity, independence or identity of KPN entities”.
A takeover of KPN, including E-Plus, by America Movil would see the rivalry between the Latin American operator and Telefonica acquire a new intensity.
The two operators are already fierce rivals in across much of Latin America but America Movil has yet to acquire a majority shareholding in a European telecoms business.
Besides its minority stake in KPN, America Movil owns 23% of Telekom Austria (Vienna, Austria) and recently announced plans for European network-sharing deal between the two companies expected to generate substantial cost savings.