PARIS-France Telecom announced it will take a 28.5-percent stake in Germany’s MobilCom, which provides mobile, wireline and Internet services, for about $3.6 billion. The German company has about 2 million wireless subscribers.
In connection with the deal, the companies said they will create a joint venture to bid for one of the Universal Mobile Telecommunications System third-generation mobile licenses to be auctioned this year by the German Telecoms Regulatory Authority.
“The alliance with France Telecom is a strategic quantum leap in the development of our company,” said Gerhard Schmid, founder of MobilCom and chairman of its executive board. “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.”
Schmid will remain the largest shareholder in MobilCom, with about 40 percent and will continue to lead the company’s executive board.
France Telecom said it has no plans to increase its stake in MobilCom in the near future, but it will have the option to buy additional shares held by Schmid in mid-2003.
France Telecom’s German plans were thwarted last year by KPN Telecom and BellSouth Corp., which acquired E-Plus a few weeks after France Telecom struck a deal for the German wireless carrier. France Telecom also has been named as a potential buyer for Orange plc when it is divested by Vodafone AirTouch plc most likely later this year.
