This is the largest acquisition of Croatian Telecom so far.

Croatian Telecom has bought Montenegrin Telecom for 123.5 million euros. It is the biggest acquisition of Croatian Telecom (HT) so far, and the first major step in the implementation of its expansion strategy in order to position itself as the leading telecom provider in the region, reports Večernji List on January 10, 2017.

Today, Croatian Telecom signed a contract with Magyar Telekom on the purchase of 76.53 percent stake in the Montenegrin Telekom, and the transaction is expected to be concluded by the end of January. According to HT, this acquisition will allow access to the Montenegrin market for HT, its suppliers and other companies from the HT Group, thereby creating the conditions for promoting export of Croatian goods and services to Montenegro.

Given that HT directly and indirectly generates more than three percent of Croatia’s GDP, the expansion will ultimately have a positive effect on economic activity, employment and budget revenues in Croatia. In addition, HT shares represent the foundation for the development of Croatian stock market, and this regional acquisition will create new value for HT. The company expects that the transaction will have a good effect on its business results.

Montenegrin Telekom is the largest telecommunications company in Montenegro which provides a complete range of fixed and mobile telecommunications services. In the first nine months of 2016, it had revenues in the amount of 69.4 million euros. When it comes to mobile network, at the end of the third quarter the company had 368,600 mobile users and was the second-largest player in the market with 32 percent of users, with largest competitors being Telenor and M:Tel. However, at a recent auction, Montenegrin Telekom bought a substantial portion of the radio frequency spectrum, which will now enable it to achieve superior coverage with 4G signal and with maximum data speeds.

With more than 140,000 users in the fixed telephony segment, Montenegrin Telekom is the absolute market leader with a market share 93.6 percent. It has over 73,000 broadband internet users and more than 60,000 IPTV users. The optical network of Montenegrin Telekom is available in more than 53,000 households, representing 27 percent of the total number of households in Montenegro. In late 2015, the company had 588 employees.

Since this is a transaction within the Deutsche Telekom group, it does not need special permit from competition agencies, although the two companies will remain independent, with the same majority owner and separate minority stakeholders, and will be listed on the stock exchange.