Telefonica Germany Rejects Speculation About E-Plus Tie-Up

The German unit of Telefonica SA (TEF) Friday rejected speculation that a tie-up with Royal KPN NV's (KPN.AE) German E-Plus division will be on the agenda in the short term.

There are no discussions with E-Plus, and also no plans in that direction, Rene Schuster, Telefonica's chief executive for Germany, told reporters on a conference call.

Speculation about a merger between the German units of Telefonica and KPN, which are both smaller than former monopolist Deutsche Telekom AG (DTE.XE) and Vodafone Group PLC (VOD.LN) in the country, has been around for quite some time. KPN Chief Executive Eelco Blok said in November he would be interested in buying Telefonica assets in Germany.

-By Philipp Grontzki, Dow Jones Newswires, +49 69 29 725 107, philipp.grontzki@dowjones.com