Report: France Télécom, Orange deal gets closer

France Télécom SA may announce as soon as today that it will acquire London-based mobile telecommunications operator Orange PLC from Vodafone AirTouch PLC, according to several published reports.

Citing executives close to the talks, the New York Times newspaper yesterday reported that France Télécom will pay around 40 billion euros ($US37.1 billion) in cash and stock to take over Orange, the UK's third-largest mobile phone operator. In addition, the French telecommunications company will also assume about 10 billion euros in debt, the report said.

Vodafone, which is scheduled to report its 1999 financial results today, would after the completion of the deal hold approximately a 10 per cent stake in the French company in the form of nonvoting shares, the report said.

France Télécom could not be reached for comment.

At 2:30pm Central European Time yesterday, France Télécom shares on the Paris Bourse were trading at 143.1 euros, up 1.3 euro, or 0.9 per cent, from the previous close.

News about the talks between France Télécom and Vodafone were first leaked late last week.

If concluded, the deal would result in the creation of one of the largest mobile phone operators in Europe.

France Télécom plans to merge Orange with its Itineris unit, the largest wireless company in France, and other wireless operations in Austria, Belgium, Denmark, Italy, the Netherlands and Switzerland, the New York Times report said.

Hans Snook, chief executive of Orange, would run the new company, which France Télécom plans to take public within a year, the report said.

France Télécom late last week also announced a plan to divest a 5.3 per cent stake in Mexican telecommunications company Teléfonos de México SA de CV (Telmex), in a deal that could raise $US1.9 billion of cash.

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