December 15, 2017 / 6:07 AM / a month ago

BRIEF-Tele2 and Deutsche Telekom agree to combine Dutch operations

Dec 15 (Reuters) - Deutsche Telekom Ag:

* TELE2 AND DEUTSCHE TELEKOM TO COMBINE THEIR DUTCH OPERATIONS

* TELE2 AB SAYS ‍TELE2 WILL HOLD A 25% SHARE IN COMBINED COMPANY AND RECEIVE A CASH PAYMENT OF EUR 190 MILLION UPON CLOSING​

* TELE2 AB SAYS ‍COMBINED COMPANY IS EXPECTED TO BE CAPITALIZED WITH AN INTERCOMPANY LOAN RECEIVABLE BY DEUTSCHE TELEKOM OF APPROXIMATELY EUR 1.1 BILLION​

* TELE2 AB SAYS ‍SHAREHOLDERS HAVE AGREED ON A DIVIDEND POLICY THAT INCLUDES A PAY-OUT RATIO OF 70% OF FREE CASH FLOW TO BE INITIATED WHEN NET DEBT TO EBITDA IS BELOW 2.5X​

* TELE2 AB SAYS ‍TRANSACTION IS EXPECTED TO CLOSE IN SECOND HALF OF 2018​

* TELE2 AB SAYS ‍AS A PART OF AGREEMENT, THERE IS A BREAK FEE AMOUNTING TO EUR 25 MILLION THAT TELE2 WILL RECEIVE, IN CASE TRANSACTION SHOULD NOT BE APPROVED BY RELEVANT AUTHORITIES​

* TELE2 AB SAYS ‍ANNUAL IMPAIRMENT TEST IN Q4 IS ESTIMATED TO RESULT IN AN IMPAIRMENT OF SEK 1.0-1.5 BILLION RELATED TO THE DUTCH OPERATION​ Source text for Eikon: Further company coverage: (Reporting By Anna Ringstrom)

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