Sprint finally gets out of Global One venture

Sprint rids Global One tie

January 26, 2000: 10:02 a.m. ET

U.S. telecom finally ends ties to troubled alliance with French and Germans

LONDON (CNNfn) - Sprint Corp. finally found its way out of the rift-plagued Global One alliance Wednesday, selling its stake to partners Deutsche Telecom and France Telecom for roughly $1.4 billion in cash and repayment of debt.
    Sprint, the third biggest U.S. long-distance phone company, has long sought to divest its ties to the troubled three-way venture and word of the exit had been expected this week. The plans to quit Global One accelerated after Sprint said last October it would merge with MCI WorldCom.
    France Telecom has said it wants full control of Global One, and announced it would release a statement later Wednesday.
    As part of the agreement, Sprint will receive $1.13 billion in cash, and France Telecom and Deutsche Telekom will repay $276 million of debt. Sprint has assured service to GlobalOne's international customers for the next two years.
    In addition, once Sprint shareholders approve the MCI WorldCom deal, both Deutsche Telekom and France Telecom will be able to sell their respective 10-percent stakes in Sprint. The European telecom companies will also give up their special rights as Class A shareholders of Sprint stock, and will resign their seats on the Sprint board.
    Global One was launched in 1996 to provide international voice and data services to large corporations in 65 countries, but the venture has suffered from bad blood between Deutsche Telekom and France Telecom after the German company led an unsuccessful takeover effort for Italy's Telecom Italia last year without notifying its French partner.
    The sale of Sprint's stake is expected to close in the next few months, Sprint said. Shares of Sprint (FON) were up 1/4 at 62 in early Wall Street trading Wednesday.
    In early afternoon trading, shares of Deutsche Telekom (FDTE) rose 5.2 percent to 69.65 euros in Frankfurt, while shares of France Telecom (PFTE) jumped 4.2 percent to 128.3 euros.