KPN will pay for the deal in shares, giving BellSouth a 9.2% holding in the Dutch company. However, its balance sheet will still be hit by the deal: accounting rules mean that it will increase KPN’s debt by E930 million.
Investing in E-Plus, Germany’s third largest mobile operator, has already cost KPN billions. However, industry sources believe this deal may be good for the company in the long term. Owning the whole of E-Plus will make a sale of the German operator easier – and many think that this would be the best way for KPN to go forward.
