Deutsche Telekom in Talks to Acquire US's Sprint,
--From AOl.-- Cooters
Frankfurt, July 1 (Bloomberg) -- Deutsche Telekom AG, Germany's largest phone company, is in talks to buy Sprint Corp., the third-biggest U.S. long-distance telecommunications provider, German weekly Welt am Sonntag said, without citing sources.
The two companies are ``in serious talks about a full merger,'' the paper said. Deutsche Telekom may pay about 240 billion deutsche marks ($117 billion) through a share swap for the 90 percent of Sprint it doesn't own, Welt am Sonntag said.
Deutsche Telekom spokesman Ulrich Lissek declined to comment. Sprint also refused to comment.
Newspapers reported last week that the former German telephone monopoly would make a bid after the European Commission and the U.S. Justice Department moved to block WorldCom Inc.'s $151 billion purchase of Sprint Corp. Deutsche Telekom shares fell 8 percent Thursday on the news, before recovering 1.8 percent yesterday.
Deutsche Telekom has said expanding in the U.S. is its greatest priority, causing analysts to see it as the most likely bidder for Sprint, Qwest Communications Inc. or even Worldcom.
Europe's second-largest phone company has been building up a war chest so that it has the means to expand. Last week it sold a record $14.5 billion of bonds. Shareholders recently approved an issue of as many as 1.5 billion shares, worth $89.7 billion at the company's current stock price.
These funds will be used to expand Deutsche Telekom's Internet business, data services to corporations and mobile phone operations.
A U.S. acquisition is essential to achieving the first two, analysts say, because of the central role the U.S. has in carrying Internet traffic, and as a home to multinational companies.
Deutsche Telekom Chief Executive Ron Sommer said last month he considers himself ``lucky'' he didn't try to buy a U.S. company last year, when some were more expensive. ``Today our market size is larger than any of the American companies,'' he said.
The company has a market value of 179.4 billion euros.
Deutsche Telekom shares yesterday rose 1.10 euros, or 1.9 percent, to 59.80 euros. Sprint shares fell 4 3/4, or 8.5 percent, to 51.
Welt am Sonntag 2/7 prerelease
Jul/01/2000 11:53 ET |
