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EU Clears France Telecom to Buy Amena

Posted on: Monday, 24 October 2005, 12:00 CDT

BRUSSELS, Belgium - The EU head office cleared Europe's second-largest telecom operator, France Telecom SA, to buy 80 percent of Spanish wireless company Amena on Monday.

The 6.4 billion euros ($7.7 billion) deal is the French firm's largest since it bought mobile business Orange in 2000 at the height of the technology boom.

The takeover would not harm competition in Europe, the European Commission said.

With the acquisition, France Telecom will become Europe's second-largest provider of mobile phone services, with an extra 9.7 million customers, behind Britain's Vodafone Group.

The deal places Spain alongside France, Poland and Britain as a core market for France Telecom. Amena ranks third among Spanish mobile operators behind Telefonica Moviles SA and Vodafone Group PLC, and has a 24 percent market share.

The EU also looked at France Telecom's proposal to integrate Amena into FreeMove, an international alliance to provide access for customers who use their mobile phones abroad. Amena's rival, Telefonica SA, is also a member, but EU regulators said the alliance's rules would ensure fair competition.

In September, France Telecom sold 3 billion euros ($3.6 billion) of new shares to finance its takeover of Amena, a transaction that saw the French government's stake in France's ex-telecoms monopoly fall from 35 percent to just over 33 percent.

Since a debt crisis in 2002, the French telecommunications giant has worked to integrate its operations and cut around 30 billion euros ($36 billion) in debt. Analysts had questioned the impact of the Amena deal on France Telecom's investment-grade debt ratings.

Amena also strengthens France Telecom's position versus Telefonica. In recent years, France Telecom has aggressively pushed into Spain's fixed-line and high-speed Internet markets with its Uni2 and Wanadoo units.

France Telecom said it is aiming for 14 million mobile customers in Spain and 85 million total customers worldwide by 2008.

Source: Associated Press/AP Online

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