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BT buys more of Viag
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August 16, 2000: 7:12 p.m. ET
British Telecom to hold 90 percent of Viag in $5.5B purchase, gains control
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NEW YORK (CNNfn) - British Telecommunications PLC is planning to acquire an additional 45 percent stake in Viag Interkom, its German telecom joint venture, and take control of the company, published reports said Wednesday.
BT, which already owns 45 percent in Viag, is buying the additional stake from Eon, the German energy group that is its joint venture partner in Germany, published reports said. The companies are expected to announce a deal in principle on Thursday. However, completion of the deal is likely to be delayed so Eon can take advantage of impending changes in German tax law, the Financial Times said.
 London-based British Telecom (BTY: Research, Estimates) is expected to pay about 3.64 billion pounds ($5.48 billion) to Eon for the stake, The Wall Street Journal said.
BT declined to comment. Viag and EON could not be reached for comment.
British Telecom has so far invested about $1.8 billion ($2 billion euros) in Viag, reports said. Viag's principal asset is wireless operator E2, which has about two million customers. Norway Telenor AS is expected to retain its 10 percent stake in Viag, published reports said.
The deal will expand British Telecom's European footprint and is the latest step by the company to convert minority stakes into controlling interests, the Financial Times said. Recent attempts by BT have been unfruitful; BT recently lost the battle for Spanish mobile-telephone operator Airtel Movil to rival Vodafone Airtouch (VOD: Research, Estimates).
Viag Interkom is the smallest of Germany's four mobile-phone operators and is considered a prize catch for British Telecom. Eon was created from the merger of utilities Veba and Viag, and has embarked on strategy of disposing non-core asset. Eon and BT have previously discussed plans to combine Viag Interkom and Eon's other telecom interests in a pan-European joint venture, the Financial Times said.
On Wednesday, British Telecom slipped 2-5/16 to close at 125-3/16. 
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