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France Telecom to Buy Amena Stake for $7.7B

Posted on: Wednesday, 27 July 2005, 06:00 CDT

PARIS - France Telecom SA announced Wednesday that it is buying an 80 percent stake in Spain's third-largest mobile-phone operator, Amena, for 6.4 billion euros ($7.7 billion).

With Amena, France Telecom is poised to become Europe's second-largest provider of mobile phone services behind Britain's Vodafone Group, and places Spain alongside France, Poland and Britain as a core market for the company.

France Telecom said it will finance the deal with a 3 billion euros ($3.6 billion) capital increase. The acquisition marks France Telecom's largest deal since it bought mobile unit Orange in 2000, and comes after a three-year break from big purchases.

Since a debt crisis in 2002, the French telecommunications giant has worked to integrate its operations and cut about 30 billion euros ($36 billion) in debt, as calculated under French accounting standards.

Shares of France Telecom rose nearly 2.2 percent to 24.90 euros ($29.85) in morning trading on the Paris stock exchange.

France Telecom indicated interest in Amena last month, but ruled itself out of the bidding for the parent company, Auna Group, which was being auctioned by Merrill Lynch. Auna has cable and fixed-line units.

The French company said it began to consider a separate deal for Amena after it became clear that Auna shareholders were open to such a bid. Amena ranks third among Spanish mobile operators behind Telefonica Moviles SA and Vodafone Group PLC, and has a 24 percent market share.

Source: Associated Press/AP Online

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