German government sells $2.7 billion stake in Deutsche Telekom 


The sale forms part of the government’s “responsible privatisation policy”, an approach to privatising state-owned enterprises whilst ensuring that public interest is maintained 

Germany has sold a €2.5 billion ($2.7 billion) stake in Deutsche Telekom through state-owned bank KfW, with the funds set to be reinvested in the country’s state-owned railway network. 

KfW said yesterday that it has sold 110 million shares at €22.13 each. The state has agreed not to sell any more shares for the next three months. 

Following the divestment, the government and KfW will still be the company’s largest stakeholder, retaining a 27.8% share.  

In response to the divestment, Deutsche Telekom confirmed today that it will increase its share buyback program by €600 million. 

Interestingly, the government says it already knows where the recouped funds will be spent: rail infrastructure.  

“The federal government will use the net proceeds from the transaction to strengthen the equity of Deutsche Bahn AG and to expand the rail infrastructure in Germany in a forward-looking manner,” said the Ministry. 

Earlier in the year, the German government confirmed that it would raise €4 billion from selling various shareholdings to fund the railways. In recent years, the country’s railway networks have begun to deteriorate, with ageing infrastructure and a lack of state investment leading to major disruptions for travellers. 

But things may be looking up. Last year, Vodafone Germany announced that it is on track to become the first in the country to launch 5G standalone (SA) on a large scale on Germany’s intercity train routes. So far, the company has activated 5G SA on over half of the country’s railway lines (15,000km).  

Join the German operators in conversation at this year’s Connected Germany – book your tickets now!  

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