- December 28th, 2011
- Dafiq Hussein
It has been revealed this past week that France Telecom is to sell its mobile phone operator, Orange Switzerland, to a private equity group, Apax Partners, for about €1.6 billion, which is the equivalent of a rather cool £1.3 billion. France Telecom, which is Europe’s fourth largest telecoms operator, will now try to refocus its attention on its core markets.
This deal has come as a glimmer of hope in what has been a rather barren spell in European private equity deals due to the region’s sovereign debt crisis. The tricky economy has also significantly driven up the cost of borrowing for transactions such as this particular buyout.
Apax announced the deal late on Friday, stating that the transaction, subject to necessary approval from the regulators, would be submitted to France Telecom’s board in January. France Telecom has been planning to get out of the Swiss market as they are now looking to review their entire portfolio. They are, however, the third largest mobile phone operator in Switzerland as they hold a 17% market share.
France Telecom has key markets in, of course France, as well as the UK, Poland, and Spain. Let’s therefore hope the proposed plans to review France Telecom’s global operations will not affect the rate of cheap calls to Poland.
The organisation is also now looking to sell their Austrian unit as well as reviewing their operations in Africa and the Middle East.
France Telecom received five separate offers in the auction of Orange Switzerland. They had stated that they were hoping to receive between €1.5 billion and €2 billion from the sale. They are planning to return up to €800 million to investors via share buybacks. Those shareholders would no longer have to worry too much about making cheap calls abroad with that sort of payout!
Furthermore, Apax had stated a desire to invest in the mobile sector, saying that it is a “key investment area” for their future. They have also invested in Danish telecoms operator TDC and Israel’s Bezeq.
It will be interesting now to see how this deal pans out. Hopefully it will go ahead without a glitch. Of course, any further news will be brought to you right here on our blog!