Exclusive: Germany eyes sale of stakes in Deutsche Telekom, Post

[November 11, 2014]  By Matthias Sobolewski

BERLIN (Reuters) - The German government is considering reducing its stakes in Deutsche Telekom and Deutsche Post, hoping to cash in on high share values at a time when it is under pressure to spend more to stimulate its faltering economy.

A finance ministry document seen by Reuters, which is due to be approved by Chancellor Angela Merkel's cabinet on Wednesday, sketches out plans for holdings in a range of companies. A sale of shares in rail operator Deutsche Bahn also remains an option, it says.

The government had wanted to sell a stake in the railway in Merkel's first term, but cancelled the plan when the global financial crisis hit in 2008. Any sale now would depend on market conditions, the document said.

Merkel's "grand coalition" government aims to balance the federal budget next year for the first time since 1969 and a share sale could help it do that at a time of slowing growth.

It could also free up billions of euros for public investments as Merkel is under pressure from European partners and domestic industry to spend more to stimulate the economy and shore up Germany's crumbling infrastructure.

At Monday's closing share price, the government's 31.7 percent stake in Deutsche Telekom -- which includes a 14.3 percent direct stake and a 17.4 percent indirect holding via state bank KfW -- was worth over 17 billion euros. Its 21 percent KfW-held stake in Deutsche Post was worth over 6 billion euros.

The document, signed by Finance Minister Wolfgang Schaeuble, says a further sale of the Deutsche Telekom stake should be "carefully examined", suggesting this may be one of the first priorities.

Reuters reported back in February, citing sources, that KfW had invited banks to make proposals for a placement of Telekom shares, which have risen roughly 50 percent since early 2013.

Deutsche Post, whose shares rose 67 percent over the same period, Deutsche Bahn and the Berlin/Brandenburg, Cologne/Bonn and Munich airports are all listed as candidates for sale.

Any rail privatisation would exclude the infrastructure, the document said. It did not set out a timetable for any of the share sales.

Deutsche Telekom shares were up 1.88 percent at 12.5 euros after the Reuters report on Tuesday, outperforming a 0.2 percent rise in the DAX index of German blue chips.

(Additional reporting by Victoria Bryan; Writing by Noah Barkin; Editing by Robin Pomeroy)

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