France Télécom SA and Deutsche Telekom AG (DT) announced Thursday their intentions to sell any remaining shares in U.S.-based Sprint Corp., officially ending the 7 year, three-way alliance between the telecommunication companies.
The European telecom heavyweights will publicly offer all of their shares in Sprint FON common stock, which together represents a 19.8 percent stake in Sprint, the companies said in separate news releases. The companies estimate their Sprint stock is worth about US$3.7 billion jointly, though the official stock price will be fixed and announced next month, France Télécom said.
Specifically, France Télécom will offer international investors 75.9 million shares, with what it calls an over-allocation offer for an additional 11.4 million shares, completely divesting itself of all Sprint shares, the company said. DT plans to do the same, France Télécom said.
It has been known since February that the three carriers planned to fully dissolve their global alliance, which has become increasingly troubled over the years. In January 2000, Global One Communcations Inc., originally established as a joint venture among Deutsche Telekom, Sprint and France Télécom, was dissolved and France Télécom won the bidding for full control of Global One. With European telecommunication carriers suffering from massive debts acquired along with new 3G (third-generation) mobile spectrum licenses, and U.S. companies weathering an economic downturn at home, it has not been a good time for partnerships. Concert Communications Co., the joint-venture telecommunication carrier established by AT&T Corp. and British Telecommunications PLC, is failing and expected to be sold by the partners.