Zblslaw --
Still trying to catch up.
This from FT on Deutsche Telecom and France Telecom:
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MONDAY JULY 20 1998ÿÿTelecomsÿ
Telecoms groups swap stakes
By Our Summaries Staff
Deutsche Telekom, the German telecoms group, and France Telecom are to acquire 2 per cent stakes in each other's capital as part of a strategy to expand their co-operation. They said they were aiming to control 10 per cent of the European market outside Germany and France by 2003.
The two groups had planned a stake swap of 5-10 per cent, but the strength of the two group's shares had made the investment too large.
Deutsche Telekom and France Telecom operate in 20 European countries, either together or individually, and have joint ventures in Italy, the UK and Switzerland.
Deutsche Telekom said the project, which will increase the two groups' co-operation by forming further local joint ventures, would be implemented by the end of 1998, adding: "This crossholding underlines the strategic partnership between the two companies."
The groups said they wanted to launch a co-operation programme to exploit synergies in research and development, multimedia, information systems and telephone cards.
Following the announcement, France Telecom said it would raise its capital by a further 5 per cent to help international expansion..
The French government said it would cut its holding in the company from 75 per cent to 62.5 per cent. The finance ministry said it would sell another 23 per cent of the shares in the company.
France Telecom has 1bn shares, with 22.5 per cent traded on the market, 2.5 per cent held by staff, and the remainder held by the government. The group now has an estimated market value of FFr416bn, compared with FFr200bn when its was partially privatised in October 1997.
On the back of the news, shares in France Telecom fell 1.85 per cent, or FFr7.7, to FFr409.0 on the Paris bourse. Meanwhile in Frankfurt, shares in Deutsche Telekom slipped DM0.30 to Dm54.50 in early trade.>>>>>
And this on Cable & Wireless and MCI:
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WEDNESDAY JULY 15 1998ÿÿTelecomsÿ
INTERNET: C&W set to buy MCI arm
By Alan Cane in London and Richard Waters in New York
MCI, the US telecoms group, is expected to announce today that it has agreed to sell its entire internet assets to Cable and Wireless of the UK in a deal valued at up to $2bn.
The two companies were last night waiting for approval for the sale from the US Department of Justice. The disposal had been demanded by US and European regulatory authorities as a condition for approving the proposed $37bn merger of MCI with WorldCom, also of the US. The European Union, in particular, ruled that MCI's agreement in May to sell its wholesale, or "backbone" internet business to C&W for œ625m ($1bn) was not enough to quiet concerns about the dominance MCI and WorldCom together could exert over the internet.
Completion of the WorldCom/MCI merger, which still awaits final approval from the US Federal Communications Commission, is expected to unlock a fresh round of takeover activity in the US. British Telecommunications, which stands to gain some $7bn from the sale of its stake in MCI, is expected to announce a deal in the US within weeks of the close of this one.
There was some surprise last night that C&W had come out ahead of US carriers in the bidding for MCI's internet business. It will be seen as a fresh triumph for Dick Brown, C&W's chief executive.
C&W will now acquire both the company's wholesale operations together with MCI's retail business, corporate and residential customers along with engineering support and sales activities. There had been fears that the delay caused by the decision to sell the retail business as well as the backbone operations could allow rivals to make competitive bids.
A purchase by C&W would represent a reversal of the trend which has seen the leading internet backbone companies fall under the control of bigger telecoms groups which control the physical networks on which internet and voice traffic is carried. WorldCom bought Uunet, the largest backbone provider, two years ago, laying the foundation for its position in the internet business. Another large independent company, BBN, was acquired last year by GTE, while Sprint and MCI, both of which have extensive national networks, have built their own internet businesses.
Purchase of the MCI assets would give Cable & Wireless some of the facilities to handle internet traffic, including the routing equipment which governs the movement of data traffic.
However, unlike its main rivals in the backbone business, it would still have to rely on other companies' networks to carry the traffic, leaving it with less control over its service in the US.>>>> |
