Telefónica said on Wednesday that it plans to take its German unit public on the Frankfurt Stock Exchange by year end, as part of the Spanish telecom company's plan to pay down debt.
It is the latest Spanish company to sell off assets, as the country continues to grapple with severe economic problems that threaten to drag down businesses there. Last week, Banco Santander held an initial public offering for its Mexican unit.
The Telefónica Deutschland business, which is comprised principally of the O2 brand in Germany, has posted big improvements in financial performance over the past three years. It earned 71 million euros last year atop 5 billion euros in revenue.
Telefónica said that it hasn't yet decided how many shares it plans to sell in the offering. To draw in potential investors, Telefónica said that the German unit plans to pay out about 500 million euros in dividends next year.
“We are convinced that an I.P.O. will enable us to raise our profile further, and to continue the successful growth story of Telefónica Deutschland in Germany in the long term,†René Schuster, the chief executive of Telefónica Deutschland, said in a statement.
