Telefonica, KPN in Merger Talks, Say Reports

LONDON (05/02/2000) - Spanish telecommunications operator Telefónica SA and its Dutch counterpart Koninklijke KPN NV are reportedly holding merger talks, according to press reports today. However, no agreement has been reached, the reports say.

Telefónica said it had been holding conversations with KPN on several matters, "including the possibility of integrating all or part of their businesses," according to a statement quoted in a report in the Wall Street Journal Europe today. But, the statement continued, "there is no certainty the mentioned talks will yield positive results."

KPN said it was in talks "to explore mutually beneficial opportunities" with Telefónica "in as much as it is in discussions with other operators", according to a statement it released on April 29.

On Friday, KPN suspended the planned IPO of its wireless communications division, KPN Mobile. Press reports attributed this decision to the pace of talks between KPN and potential partners.

On Sunday, KPN reportedly said in another statement, "We are talking to more than two potential strategic partners. When one set of discussions accelerates, it has an effect on other discussions. That is what happened last week."

KPN, in the Hague, the Netherlands, can be reached at +31-70-343-3379, or at http://www.kpn.com/. Telefónica, in Madrid, can be reached via the Web at http://www.telefonica.com/.

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