According to individuals familiar with the situation, billionaire Mukesh Ambani’s Reliance Industries is considering an offer for Deutsche Telekom AG’s Netherlands business.
According to the persons, the Indian conglomerate is working with an adviser to consider a bid for T-Mobile Netherlands BV. They asked not to be identified since the information is classified.
According to the people, Deutsche Telekom is looking for around 5 billion euros ($5.9 billion) in any deal.
According to the persons, discussions are still ongoing, no final decision has been taken, and there is no guarantee that Reliance will proceed with a formal offer. Deutsche Telekom did not respond to a request for comment. Reliance did not respond to a request for comment right away.
Bloomberg News reported last month that Deutsche Telekom is working with Morgan Stanley on the sale of the company, which has sparked interest from private equity groups such as Apax Partners, Apollo Global Management, BC Partners, Providence Equity Partners, and Warburg Pincus.
These assets are attractive to buyout businesses because they allow them to take control of the underlying infrastructure, which provides predictable long-term returns.
Royal KPN NV, a Dutch telecom company, claimed in May that it had turned down an “unsolicited high-level approach” from investment firms EQT AB and Stonepeak Infrastructure Partners.
KPN shares fell as much as 4.7 percent to a three-week low in Amsterdam on Tuesday after Reliance announced it was exploring an offer for its competitor.
Reliance Industries is India’s most valuable firm, with a portfolio that includes oil refining, petrochemicals, retail, and telecoms. T-Mobile Netherlands would be a unique acquisition in Europe, and it would come as Ambani attempts to turn Reliance from an old-economy conglomerate into a technology and e-commerce behemoth.
Ambani has already stated that he hopes to expand Reliance’s digital unit, Jio Platforms, internationally in the future, and the company received more than $20 billion in funding from investors including Facebook last year.
“This could be one step forward for that direction, in addition to leveraging natural synergies to Jio,” said Kranthi Bathini, a strategist at Mumbai-based consultancy WealthMills Securities. “This could also serve as the beginning of aggressive acquisitions in this space and deploying funds in different geographies after Jio Platforms raised record money last year.”
Reliance Industries’ stock has climbed 5.2 percent this year, valuing the company at Rs 13.7 trillion ($184 billion). The stock climbed as high as 1.7% on Tuesday before losing some of its gains.
In 2000, Deutsche Telekom entered the Dutch mobile phone market by partnering with Belgacom SA and Tele Danmark to form a joint venture. After T-Mobile bought the rest of the company in 2003, it was renamed T-Mobile Netherlands.
