Telefonica Denies Deutsche Telekom Merger Rumors

Telefónica de España SA today denied resurfacing rumors that Telefónica will merge part of its business with that of Deutsche Telekom AG.

"It is not true," said Edward Hollin, Madrid-based spokesman for Telefónica, commenting on press reports that Telefónica and Deutsche Telekom plan to merge their international operations. "The stories are false. There has been no contact between the two companies."

"We don't comment on speculation in the press," was the response from Deutsche Telekom spokesman Stephan Broszio.

The merger rumors are easy to understand, given that the German telecom provider has been actively seeking new partners this year, particularly after its bid for Telecom Italia SpA failed and the carrier suddenly found that its long-standing partnership with France Telecom SA had gone sour.

Further logic behind the thinking that Telefónica and Deutsche Telekom are talking, stems from statements made by Deutsche Tekekom's chairman, Ron Sommer, that the German carrier is looking to acquire companies outside of Germany.

Also, the German telecom provider has the means for expansion: last month a Deutsche Telekom share offering brought in some 11 billion [B] euros (US$11.5 billion [B]), which it said it will use both to increase Deutsche Telekom's competitiveness and to expand internationally.

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