France Telecom Takes 28.5 Percent Stake in MobilCom
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France Telecom has agreed to pay 3.74 billon euros ($3.6 billion) for a 28.5 per cent stake in MobilCom, a German company with a large share of the market for mobile and fixed telephony services.
Prior to France Telecom's capital injection, MobilCom has been valued at 9.47 billion euros ($9.12 billion).
The two companies say they will continue to pursue their common strategy of offering fixed, mobile and Internet services in Germany to consumers and businesses. One project at the planning stage is a joint venture to bid for one of the UMTS 3G mobile licenses when the German Telecoms Regulatory Authority auctions them later this year.
"Our investment in MobilCom, one of Germany's most dynamic service companies, perfectly matches our strategy of becoming Europe's leading fixed, mobile and Internet operator", said Michel Bon, chairman and chief executive officer of France Telecom.
MobilCom has 2 million cellular subscribers and also owns freenet.de AG, the fastest growing ISP in Germany with over 1 million active users.
Speaking for MobilCom, Chief Executive Officer Gerhard Schmid said the alliance with France Telecom was a strategic quantum leap in MobilCom's development.
"It gives us the financial scope for the acquisition of a UMTS license and for the construction of the requisite mobile network. In addition, we will profit from France Telecom's international activities," said Schmid.
Listed on the Neuer Markt since March 1997, MobilCom had revenues of DM 2.4 billion ($1.22 billion) and profits of DM 244 million ($124 million) in 1999.
France Telecom had revenues of 27.2 billion euros ($26.2 billion) in 1999. In the same year it had 56 million customers, including 14 million mobile subscribers in France, and operations in more than 75 countries.