KfW, a state-owned bank, lowers its holdings in Deutsche Telekom; the acquired funds will be funneled into Deutsche Bahn.
The sale of shares could bring in 2.5 billion euros. The money from these sales is planned to be used, as per the Finance Ministry, "to reinforce the equity of Deutsche Bahn AG and create modern rail infrastructure in Germany."
The government is carrying out its "prudent policy of privatization" with this deal, stated the Ministry of Finance, headed by Finance Minister Christian Lindner (FDP). The KfW and the government will remain the main shareholders of Deutsche Telekom and will "maintain a significant stake" in the company, as per the announcement made by the lender and the ministry.
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The sale of KfW's shares in Deutsche Telekom is expected to be handled by the KfW Banking Group. The Development bank's decision to reduce its stake is aligned with the strategies of the KfW Banking Group. The proceeds from this share sale will significantly boost Deutsche Bahn's equity. The Federal Ministry of Finance has endorsed the use of these proceeds for improving rail infrastructure in Germany.
The German government's approach to this deal reflects its ongoing commitment to privatization, as stated by the Federal Ministry of Finance. Despite the sale, both KfW and the government will continue to hold a significant share in Deutsche Telekom, according to the KfW Banking Group's announcement. Additionally, the reduction in KfW's shares in Deutsche Telekom will not affect the state's stake in German Telekom or German Railways.
