KPN Koninklijke KPN NV

Dutch telecom company KPN (KPN.AE) Monday confirmed it is in talks to sell its German mobile operator E-Plus, a move that would likely see the unit acquired by Spain's Telefonica S.A. (TEF) in a deal potentially valued at around 5 billion euros ($6.6 billion).

"At this stage the outcome is not yet clear," KPN said.

The Financial Times earlier today reported that Europe's largest telecom company, Telefonica, is in advanced talks to buy E-Plus, Germany's fourth-largest operator.

Write to Eyk Henning at eyk.henning@wsj.com