The German government has sold a €2.5 billion ($2.7bn) stake in Deutsche Telekom AG.

Germany has sold the stake through state-owned bank KfW. The funds are set to be reinvested in the country’s state-owned railway network.

“The federal government will use the net proceeds from the transaction to strengthen the equity of Deutsche Bahn AG and to expand the rail infrastructure in Germany in a forward-looking manner,” said the Ministry.

KfW said earlier this week that it sold 110 million shares at €22.13 each, while the state has agreed not to sell any more shares for the next three months.

Following the divestment, the government will still be the company’s largest stakeholder, with a stake of 27.8 percent.

Deutsche Telekom said it will increase its share buyback program by €600 million in response to the sale.

The company launched the scheme in November 2023 after it increased its holdings in T-Mobile US.