Telefonica eyes KPN after cuts

City A.M. Reporter

COMS giant Telefonica cut borrowings to under €50bn (£43.2bn) in the first half of the year, putting it on track to meet debt targets, even after its planned purchase of German mobile operator E-Plus.

Telefonica announced plans to acquire Dutch rival KPN’s German unit on Tuesday, for €8.1bn, in a deal to be financed through cash and shares despite a two-year drive to pay down debt.

A month after agreeing to sell its Irish arm, the deals put Telefonica on course for a showdown with EU antitrust watchdogs, who are wary when markets consolidate down to a few players. Telefonica is one of Europe’s most indebted telecom operators, as Spanish companies face considerable pressure from the country’s ongoing recession.