|
Billion-dollar bauble? KPN’s offer for Getronics is by nature cosmetic, a clear case of commercial gesture politics. Note to self: where KPN leads, others follow.
It’s the price tag that gives it all away. Dutch incumbent telco KPN is offering €766mn for IT services company Getronics. Now, €766mn seems like an oddly precise valuation to place on a business. But it’s not €766mn, is it? No… at current exchange rates, it’s US$1bn. That’s right: one billion dollars. That has a nice ring to it, as befits a telco’s takeover.
At a time when private equity investors will not get out of bed for less than US$10bn, this looks like a case of “small earthquake…”. Within the narrow confines of Dutch telecoms, however, it is genuinely seismic – and the aftershock will be felt further afield.
KPN’s dalliance with Getronics has been an on-off affair for almost a year. It is believed that KPN blanched at taking on certain non-core aspects of Getronics’ business, and it is now reported that these have since been shed. Without that move, Holland’s enlightened labour laws would have added hugely to the expense involved in any takeover from KPN’s point of view.
Now all that has changed. According to KPN’s CEO, Ad Scheepbouwer, “telecommunications and IT services are increasingly becoming two sides of the same coin. More and more companies are converging their telecoms and IT requirements, sourcing all services from a single end-to-end vendor. Combining Getronics’ business with our own will immediately add value and be transformational for our existing ICT business. It will give us in one step real critical mass and significant expertise, enhancing our opportunity to become the ICT partner of choice for our widened client-base in our key territories.”
Notwithstanding (or perhaps because of) its gerrymandered price tag, KPN-Getronics is a marker that will create an element of peer-group pressure in European telco circles. The Dutch company tends to be seen, by turn, as pro-active, neutral and cuddly. What works for KPN, according to this reasoning, will work for other mid-ranking and even large telcos.
Don’t expect to wait too long to find out whether this is the case.
Jim Chalmers
|
