DT said it favors increasing its 10 percent stake in Sprint.
NEW YORK, April 22 (Reuters) - The plans of Telecom Italia and Deutsche Telekom (quote
from Yahoo! UK & Ireland: DTEG.F) to merge in the largest corporate marriage yet seem certain to
affect the alliance between Deutsche Telekom, France Telecom , and Sprint Corp. (FON - news).
France Telecom said on Thursday that the merger ''is a clear violation of the undertakings
between France Telecom and Deutsche Telekom.'' Those undertakings include Global One, the
alliance of Deutsche Telekom, France Telecom and Sprint, the No. 3 U.S. long-distance
company.
The money-losing Global One partnership has been plagued recently by reports of internal tensions. All three companies nevertheless
stressed their commitment to the venture prior to the recent merger announcement, and Deutsche Telekom and France Telecom said the
partnership would break even by the end of 2001.
In 1994, the two European companies each took a 10 percent equity stake in Sprint, forming Global One two years later mainly to serve
multinational corporations. Deutsche Telekom and France Telecom each hold a 25 percent stake in Global One, with Sprint holding the
remaining 50 percent.
Deutsche Telekom said Thursday it favors increasing its 10 percent stake in Sprint. Such a move would give the antagonized France Telecom
the right to match any additional investment by Deutsche Telekom, according to agreements between the companies. Currently, neither
company can raise its stake without Sprint's approval. |
