U.S. firm buys stake in Deutsche Telekom

BONN -- The Blackstone Group, a New York-based private equity firm, has agreed to pay about 2.7 billion euros (US$3.3 billion) to buy a 4.5 percent stake in Deutsche Telekom AG from KfW Bankengruppe, a bank that's owned jointly by Germany's federal and state governments.

Frankfurt-based KfW's ownership stake in Deutsche Telekom will shrink to 17.3 percent once the sale closes. But the bank will continue to be the Bonn-based telecommunications company's largest shareholder; the German government holds a separate 15.2 percent share.

The addition of Blackstone as an investor comes as Deutsche Telekom CEO Kai-Uwe Ricke is moving to cut operating costs by reducing the company's workforce. At the same time, the company plans to spend 3 billion euros to build a high-speed fiber-optic network that will operate in 50 German cities.

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