Germany state lender KfW sold a 2.2 per cent stake in operator Deutsche Telekom for €2.5 billion, as the government continues to make moves to divest parts of its corporate holdings.

In total, the bank sold 110 million shares in the operator to institutional investors, part of a series of moves to raise cash to invest in rail operator Deutsche Bahn and build out the country’s transport infrastructure.

It leaves the government and KfW with a combined stake of 27.8 per cent in Deutsche Telekom, meaning they remain as the operator’s largest shareholders.

“Due to the receptive stock market environment, the placement was successfully completed,” Germany’s finance ministry said in a statement seen by Bloomberg. Going forward, it said it would ensure the stake remained stable.

In response to the move, Deutsche Telekom announced it will increase its share buyback programme by €600 million. The initiative launched in November 2023 as a way to repay investors who took a hit after the operator increased its holdings in T-Mobile US.

The sale forms part of the finance ministry’s “responsible privatisation policy”, which has also seen it raise €2.2 billion from offloading a stake in former mail monopoly Deutsche Post earlier this year.