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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: American Spirit who wrote (52508)	5/29/2000 12:34:00 PM
From: TheKelster	Read Replies (3) \| Respond to of 99985

Do you have a link to this piece of news?

To: American Spirit who wrote (52508)	5/29/2000 12:53:00 PM
From: UnBelievable	Respond to of 99985

France Telecom nears agreement to buy Orange for $37.26 billion By Anita Raghavan, Gautam Naik and Nikhil Deogun THE WALL STREET JOURNAL LONDON, May 29 ? France Telecom SA is close to an agreement to acquire Orange PLC from Vodafone AirTouch PLC for about 25 billion pounds ($37.26 billion or 40 billion euros) in cash and stock ? a deal that is expected to be announced as early as Tuesday, people familiar with the situation say. THE BOARDS OF Vodafone, France Telecom and Mannesmann AG, which acquired Orange late last year but which itself was taken over by Vodafone, are expected to vote on the agreement Monday. Under the agreement, these people say, France Telecom would pay a little less than 15 billion pounds in cash and 10 billion pounds in stock to acquire Orange, which operates a big mobile-telephone network in Britain. In addition, France Telecom would assume about two billion pounds in Orange debt and the roughly 4.1 billion pound cost of the third-generation mobile-phone license Orange has agreed to buy from the British government. Under the proposed deal, France Telecom has agreed to combine its mobile operations with Orange?s operations and take part of that combined operation public later this year or in the first quarter of 2001, these people say. The move is aimed at overcoming the resistance of Orange Chief Executive Hans Snook and his management team. They were averse to a deal in which Orange would simply become a subsidiary of a telecommunications giant. The combined mobile-phone company would be run by Mr. Snook. Including stakes in various other companies, the new unit would be the second-largest mobile-phone company in Europe, after Vodafone. The combined business would have interests in Britain, France, Belgium, Portugal, Germany, Italy, Denmark and Eastern Europe. The transaction would increase pressure on three European phone companies with major wireless aspirations in Europe: Telefonica SA of Spain; KPN NV of the Netherlands and Sonera Corp. of Finland. Recently, an attempted merger between Telefonica and KPN fell apart because Telefonica?s chairman, Juan Villalonga, couldn?t muster political support from the Spanish government ? led by his boyhood friend, Prime Minister Jose Maria Aznar ? and couldn?t get enough backing from major shareholders. However, Mr. Villalonga has told advisers that he has mended the rift with the prime minister and is trying to do the same with shareholders, such as Banco Bilbao Vizcaya Argentaria, or BBVA, a big Spanish bank, according to people close to Mr. Villalonga. Although Telefonica and KPN haven?t reopened merger talks, ?that deal could indeed come back,? says one person close to the situation. KPN could also attempt to buy Sonera to fulfill its strategy of becoming a pan-European wireless player. The acquisition of Orange would follow a series of setbacks to France Telecom?s international strategy. The French company?s ambitious Global One venture with Sprint Corp. and Deutsche Telekom AG performed poorly, and France Telecom?s attempt to buy E-Plus, Germany?s third-largest wireless company, was thwarted by KPN, which now controls E-Plus. By acquiring Orange, France Telecom and its British partner, cable provider NTL Inc., would be able to better attack the fast-growing U.K. wireless market. Orange?s third-generation license will allow it to offer new data and Internet services to mobile-phone customers. France Telecom hopes to use its British beachhead to acquire other third-generation licenses across Europe and compete more effectively with large rivals like Vodafone. KPN had also held intensive negotiations to acquire Orange, but France Telecom was more aggressive and won exclusive negotiating rights from Vodafone to acquire the U.K. company. Copyright ¸ 2000 Dow Jones & Company, Inc. All Rights Reserved.