Deutsche Telekom AG — M&A Activity 1999

Apr 22, 1999

News Details

Ad-hoc | 22 April 1999 00:10

Ad hoc-Service: Deutsche Telekom AG

Ad-hoc Mitteilung übermittelt durch die DGAP. Für den Inhalt der Mitteilung ist allein der Emittent verantwortlich. —————————————————————————— Ad hoc notification from Deutsche Telekom AG in accordance with paragraph 15 of the securities Trading Act (Wertpapierhandelsgesetz) Released by Deutsche Telekom AG, part 1 Bonn/Rome, April 21, 1999 – The Board of Directors of Telecom Italia S.p.A., which met this morning in Rome , approved the Business Combination Agreement (the “BCA”) with Deutsche Telekom AG and has mandated the Chairman and the Chief Executive Officer to convene a Shareholders’ Meeting, as per Italian Law . The Board of Management and the Supervisory Board of Deutsche Telekom AG have also approved the planned merger of the two companies. 1. The project Deutsche Telekom AG and Telecom Italia S.p.A. intend to combine all their activities. This combination will give rise to the world’s second largest telecommunications company. The project will be realised according to the following modalities : (i) Constitution of an new third party company (the “NEW COMPANY”) which will be formed under German law pending a transformation into a European Law Company, that will launch contemporaneosly two public share exchange offers which will have as their objective all the ordinary and all the savings equity of Telecom Italia S.p.A. (the “Telecom Italia Offer”) and all the ordinary equity of Deutsche Telekom AG (the “Deutsche Telekom Offer”). (ii) Newly issued shares of NEW COMPANY will be offered in exchange according to the following ratios: (I) one share of NEW COMPANY for each share of Deutsche Telekom AG and; (II) one new share of the NEW COMPANY for 3 ordinary shares of Telecom Italia S.p.A.; (III) and one new share of the holding company for every 5.61 savings shares of Telecom Italia S.p.A. (iii) Should an acceptance level of 90 percent of the ordinary shares of Telecom Italia S.p.A. as well as 90 percent of the entire share capital of Telecom Italia S.p.A. be reached or exceeded, the public share exchange offer exchange ratio for Telecom Italia shares will be improved as follows: (i) one new share of the NEW COMPANY for each 2.9412 ordinary shares of Telecom Italia S.p.A., (ii) and one new share of the holding company for every 5.50 savings shares of Telecom Italia S.p.A.; (iv) Should an acceptance level of 90 percent of the shares of Deutsche Telekom AG be reached or exceeded, the public share exchange offer exchange ratio for Deutsche Telekom shares will be improved as follows: one share of the NEW COMPANY for each 0.99 of a Deutsche Telekom share; (v) The shares of the NEW COMPANY will be quoted on the Frankfurt Bourse, the Milan Bourse and the New York Stock Exchange. and will be included in the principal European equity indexes. (vi) Both of the above offers will be extended on the US market. 2. Merger of Equals Telecom Italia S.p.A. has been informed, and the Board of Directors has taken note by withdrawing its announced concern, that the Italian Ministry of the Treasury has received today a letter from the German Ministry of Finance which confirms the intention of the Federal Republic of Germany to: – Give ist own consent to the project of integration and to the principle of parity laid down in the BCA; – Reduce and dispose of its shareholdings in Deutsche Telekom AG over time in line with the Government’s privatization policy as soon as feasible, subject to market conditions; – not interfere with the business strategy and corporate governance structure of companies being privatized, that this policy shall apply to the NEW COMPANY of the group and that the Federal Republic of Germany will vote consistently with this policy also with regard to the parity of representation between Deutsche Telekom AG and Telecom Italia S.p.A. in corporate bodies of the NEW COMPANY. Part 2 to follow Ende der Mitteilung