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France Tel sells rival stake
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December 19, 2000: 4:10 a.m. ET
France Telecom sells Telekom stake for $2.8B, ends fractious partnership
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LONDON (CNNfn) - France Telecom SA said Tuesday it sold its holding in former partner Deutsche Telekom AG for $2.8 billion Tuesday, ending a relationship that had turned acrimonious.
France Telecom (PFTE) sold 54.9 million shares, representing 1.8 percent of the German firm's capital, at  56.20 per share. Generating proceeds of 3.1 billion ($2.8 billion), the sale threw up a capital gain of 1.9 billion before tax.
The buyer is the institution through which the German government holds its majority stake in Deutsche Telekom. The price France Telecom obtained for the shares was linked to the price at which Germany sold its latest batch of Telekom shares to the public in June.
The French and German firms agreed to unwind their cross-shareholding in June, after their attempt to forge a European partnership fell apart. Deutsche Telekom retains a 1.8 percent stake in France Telecom, which the French firm can buy back at the prevailing market price any time between January 2002 and January 2003.
Telekom (FDTE) shares on Tuesday fell 1.3 percent to 35.20.
The two firms built a potentially powerful partnership of continental Europe's two largest telecom operators, but fell out in 1999 when Deutsche ditched the French firm in favor of an ultimately unsuccessful attempt to merge with Telecom Italia SpA.
Since then, relations have been fraught, with each company seeking to establish a toehold on the other's home turf. France Telecom bought out Deutsche's investment in Global One, their alliance with Sprint Corp. (FON: Research, Estimates) to provide international services to businesses 
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