France Telecom Sells 27% MobilCom Stake To Texas Pacific

PARIS -(Dow Jones)- France Telecom SA (FTE) said Monday it has sold 27.3% of German mobile phone operator MobilCom AG (MOB.XE) to Texas Pacific Gruop (TPG.YY) for EUR265 million.

France Telecom said in a statement that the deal reflects its "withdrawal...from the German residential and mobile market."

The asset sale comes as Europe's second-largest telecom operator is consolidating its position throughout Europe, preferring higher-growth opportunities to some long-standing positions. This was demonstrated by its recently-announced acquisition of minority shareholders in mobile unit Orange Romania.

"The message is that we turned the page in Germany (and)...we actively manage our portfolio of assets," France Telecom Chief Financial Officer Michel Combes said in an interview.

France Telecom's acquired its stake in Mobilcom in March 2000, just as a decade-long rally in telecommunications assets took a U-turn.

At the time, the French company was looking to complement its foothold in the Italian market - through mobile and fixed-line operator Wind SpA (WIF.YY) - with a stronger position in Germany.

France Telecom has since disposed of its stake in Wind and other non-core assets as part of a plan that has helped cut around EUR30 billion in net debt over the past two and a half years.

France Telecom will post net gain of EUR265 million, on the Mobilcom stake Combes said. The French company had written off the value of its holding after it contributed to Mobilcom's own restructuring during the market downturn. France Telecom will continue to hold 1% of Mobilcom to keep an eye on the market, Combes said.

France Telecom will present a new industrial plan next month aimed at taking the company through 2008 and cutting another EUR6 billion to EUR10 billion in net debt.

-By Brian Lagrotteria, Dow Jones Newswires; +33 (0)1 40 17 17 55; brian.lagrotteria@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 2nd May 2005