Cable & Wireless plc announced it will break off its alliances with Germany-based Veba AG.
Cable & Wireless spokeswoman Jennifer Weller said the companies formed two partnerships in early 1995. Vebacom GmbH started as a 55 percent/45 percent joint venture led by Veba, which was formed to build a telecom network in Germany, she said. German power giant RWE Telliance bought a small stake in that venture last year.
Cable & Wireless Europe, an equal partnership between Cable & Wireless and Veba, was created to enter telecommunications markets in Switzerland and the European Union countries, excluding Germany and the United Kingdom, said Weller.
Under the new terms, Veba will acquire full ownership of Vebacom GmbH by paying Cable & Wireless about $1.34 billion, and Cable & Wireless will obtain full ownership of Belgium-based Cable and Wireless Europe SA for $54.5 million.
European press reported that efforts to end the alliances were held up by disagreements on price, specifically the amount Veba would pay Cable & Wireless for its share in Vebacom.
Veba is a 10.4 percent shareholder in Cable & Wireless, so shareholders in both companies must approve the dissolution.
“Veba is committed to large-scale investments in Germany and elsewhere in Europe,” while Cable & Wireless is committed to the success of its investments through its Cable & Wireless Communications arm, said the company.
Speculators say Cable & Wireless wants to focus its resources in the United Kingdom and Asia.
