Telefonica S.A. (ADR) (NYSE:TEF) agreed on Tuesday to buy Germany's third-largest mobile phone service operator, E-Plus, from Dutch telecommunications company Royal KPN, for a deal valued at 8.1 billion euros ($10.7 billion).
Madrid-based Telefónica said in a statement that it will combine its 19.3 million O2 customers with E-Plus' 23.4 million customers. E-Plus recorded 3.4 billion euros in revenue last year.
Some of the details of the agreement mean that KPN will sell E-Plus to Telefónica for 3.7 billion euros in cash, and KPN will receive a 24.9 percent stake in Telefónica Deutschland.
The deal, which is pending approval from European antitrust officials and shareholders, will create Germany's largest mobile-phone operator and signals accelerating consolidation in Europe's phone sector.
T-Mobile Germany and Vodafone Germany control more than half of Europe's telecommunications market share.
Malik Singleton covers manufacturing and other economic news. His previous roles were with City Limits, TIME.com, Black Enterprise and PCMag.com. He is an adjunct at CUNY's...