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Telekom buys out Matav
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July 3, 2000: 10:56 a.m. ET
Deutsche Telekom pays $2.2B for SBC stake, takes control of Hungarian co.
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LONDON (CNNfn) - Deutsche Telekom AG secured control of Hungarian telecom operator Magyar Tevkozlesi, or Matav, by agreeing Monday to pay $2.2 billion for the stake held by SBC Communications Inc.
Telekom had an option to acquire the Matav stake, which SBC (SBC: Research, Estimates) inherited through its purchase of Ameritech last year. Telekom and Ameritech held 59.53 percent of Matav through MagyarCom, a 50:50 joint venture.
The deal is the first that Telekom has struck since it raised $14.5 billion last week in a record-breaking bond issue, and marks the commitment of chief executive Ron Sommer to building its international presence by acquisitions.
Matav provides long-distance and local fixed-line calls, mobile and data services. The firm posted net earnings of $311 million in 1999 on revenue of $1.524 billion. It was the first central European firm to list its American depositary receipts in New York.
The Matav statement said the deal was based on Matav's closing share price of 1,895 forints on June 30. The stock has slumped from a high of 2,655 forints in March.
The stock had been suspended in Budapest pending an announcement of the share sale, and reopened on Monday at 1,920, fractionally above Friday's close.
Telekom (FDTE) shares fell 3.2 percent to  57.80 in afternoon trading in Frankfurt. 
-- from staff and wire reports
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Matav
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