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France Tel near Orange deal
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May 29, 2000: 4:08 a.m. ET
France Telecom reportedly ready to acquire UK cellular firm for $45B
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LONDON (CNNfn) - France Telecom is likely to announce Tuesday the long-anticipated purchase of British mobile-phone operator Orange from Vodafone AirTouch in a deal valued at around £30 billion ($45 billion), including debt, according to news reports.
The deal would propel France Telecom into the top three among European cellular operators with around 20 million subscribers, behind Vodafone and Telecom Italia Mobile. It would also fill the gap in the last major European mobile market where it lacks a presence.
France Telecom (PFTE) stock was up 1 percent at  143.60 in late afternoon trade in Paris. The stock had jumped 6 percent earlier on reports that talks with Vodafone were close to completion.
France Telecom has been lining up funds to pay for Orange. The French telephone firm announced plans Friday to sell its 7 percent stake in Telefonos de Mexico  and it is reported to have lined up a 20 billion loan from a syndicate of banks.
Other companies reported to have been interested in Orange include Royal KPN of the Netherlands in partnership with Japan's NTT DoCoMo, the world's largest cellular firm by market value.
Orange's value has soared since Germany's Mannesmann bought it last year for $36 billion, topping a rival bid from France Telecom. Vodafone subsequently acquired Orange after taking over the German firm. The European Commission made the disposal of Orange a condition of regulatory approval for the Mannesmann takeover.
France Tel chases UMTS prize
Vodafone had been considering divesting Orange as an independent company, although France Telecom's haste to snap up the firm may make such a move unnecessary. The French company indicated its desire to acquire Orange as early as February.
France Telecom previously attempted to beef up its presence in Britain. France's largest firm by market value bought a minority stake in Nasdaq-listed U.K. cable firm NTL (NTLO: Research, Estimates) last July, and lost out in the bidding for a third-generation mobile license in Britain earlier this year when the price got too steep.
Buying Orange, however, would give France Telecom a position at the leading edge of cellular technology because the U.K. network won one of the five third-generation licenses that were up for grabs.
Orange borrowed some £4 billion to pay for its Universal Mobile Telecommunications System (UMTS) license. The higher-than-expected cost of the new licenses also is a factor in Vodafone's desire for a quick deal: the U.K. firm faces a hefty bill for its license at the same time as it bids for others across Europe.
Orange also would place the French firm in direct U.K. opposition to former partner and now bitter rival Deutsche Telekom (FDTE). Deutsche bought fourth-ranked British cellular player One2One in August for $13.6 billion. 
-- from staff and wire reports
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