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Deutsche Telekom AG and France Telecom SA merger
By David at 09/08/2009 - 15:47

Deutsche Telekom AG and France Telecom SA said they plan to combine their British mobile phone units -- T-Mobile UK and Orange UK -- to form that country's biggest mobile operator. Deutsche Telekom said it has entered exclusive negotiations on combining its struggling British unit T-Mobile UK with France Telecom's Orange UK in a 50-50 joint venture.
The tie-up could benefit all operators in Britain's already crowded mobile telecommunications sector by reducing the pressure to cut prices, though mergers inevitably will mean job losses. The combined company would have a customer base of 28.4 million mobile phone users, or about 37 percent of U.K. mobile subscribers at the end of 2008. That would overtake O2, which has a 27 percent share of the British market. Vodafone is second with 25 percent. Orange has 22 percent, T-Mobile 15 percent and Hutchison Whampoa's 3 has 8 percent. The proposed deal "is expected to create substantial value for both shareholders," Deutsche Telekom said in a statement. It added that it expects the merger to generate synergies with a net present value of more than 3.5 billion pounds ($5.7 billion). Deutsche Telekom and France Telecom expect to sign a definitive agreement on the tie-up by the end of October, and to obtain antitrust approval in the first half of 2010, Pellissier said. Tom Alexander, currently chief executive of Orange UK, has been named to lead the combined organization, the companies added. The business had combined 2008 revenue of some 7.7 billion pounds and earnings before interest, tax, depreciation and amortization of 1.7 billion pounds, Deutsche Telekom said.

by David on Tue, 09/08/2009 - 15:48

With such big merger, I am sure layoff will be coming effecting many people.


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