Phone hookup
September 8, 2009
The deal would see a 50-50 joint venture between the French-owned Orange UK and German-owned T-Mobile UK, with the aim of strengthening their positions in the highly competitive British market.
The integration of the two telecoms would create an entity with an estimated net value in excess of 4 billion euros ($5.74 billion). The firm would command a dominating 37 percent market share with around 28.4 million clients.
Any merger would first need approval by both groups' supervisory boards and competition authorities. A deal is expected to be signed by October.
Deutsche Telekom has been looking at improving the situation of its troubled British mobile unit for some time, but did not want to incur the costs of restructuring alone. For France Telecom, the deal is seen as a way its subsidiary can increase its market share without paying cash or taking on more debt.
Deutsche Telekom said Tuesday in a statement the tie-up would give British clients "expanded network coverage and enhanced indoor and outdoor network quality for 2G and 3G services."
Orange UK Chief Executive Officer Tom Alexander was to take on the same post at the new company, and be seconded by T-Mobile UK CEO Richard Moat, it added.
dfm/AFP/Reuters/AP
Editor: Jennifer Abramsohn