Telekom Austria Gets MDC Stake

Telekom Austria closes acquisition of a majority stake in Belarusian mobile operator MDC for €730M

November 20, 2007

2 Min Read

VIENNA -- The Telekom Austria Group (VSE: TKA, OTC US: TKAGY) today announced, that it has closed the acquisition of a 70% stake in Cypriot SB, the sole owner of the Belarusian mobile operator MDC, for an enterprise value of approximately EUR 730 [1] million after having received the approval of relevant antitrust authorities. MDC will be fully consolidated into the mobile communication segment of the Telekom Austria Group from October 1st, 2007 and will positively impact revenues and EBITDA of Telekom Austria Group for the full year 2007.

In October 2007, Telekom Austria Group reached an agreement to acquire the stake from Mr. Ead Samawi and his partners, entered into a call and put option agreement related to the remaining 30% stake held by Mr. Samawi and his partners exercisable in the fourth quarter 2010 for approximately EUR 3201 million and furthermore agreed on a performance based deferred consideration. The amount of the deferred consideration, which is payable in the fourth quarter 2010, will be directly linked to the future financial performance of MDC.

Boris Nemsic, CEO of Telekom Austria Group and CEO of mobilkom austria.: “I am pleased to announce the closing of the acquisition of the majority stake in MDC and to welcome the company into the Telekom Austria Group. This successful transaction is the consistent execution of our strategy for profitable growth in Eastern and South-Eastern Europe and offers us an entry to the attractive telecommunication market in Belarus.”

Following the closing the management team of MDC will be strengthened by Helmut Duhs as CEO and CFO of SB Telecom in charge of MDC. Helmut Duhs will head a team of Belarusian experts with deep knowledge of the Belarusian market and Austrian professionals with extensive experience in Telekom Austria Group and its international subsidiaries.

Telekom Austria AG (NYSE: TKA; Vienna: TKA)

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