France Telecom Cancels TeliaSonera Bid

France Telecom has withdrawn its proposed takeover of TeliaSonera - following the failure of talks between the two companies. As the terms and conditions have not been significantly improved, the Board of TeliaSonera maintained its view that the proposal substantially undervalues the company.

In a statement, the company said: "TeliaSonera is a strong business with excellent growth prospects in its own right. The Board and management are focused on developing the company to its full potential, driving strong and sustainable earnings growth and maximising value for all shareholders," says Tom von Weymarn Chairman of the Board of TeliaSonera.

France Telecom's Chief Executive Didier Lombard said earlier this month that the takeover must have the support of TeliaSonera's board, adding that a hostile offer would not be feasible.

France Telecom outlined plans to acquire TeliaSonera in a $42-billion cash and share deal on June 5. The offer was immediately rejected by the TeliaSonera board and the Swedish government, the company's largest shareholder.

For its part, France Telecom said that it "has today decided not to submit a firm offer to TeliaSonera's shareholders," adding, "Notwithstanding the interest shown in the project, the dialogue opened with the board of directors of TeliaSonera was unable to reach agreement on its financial conditions."

The bid would have created Europe's biggest telephone company, boosted customers by 39 percent to 237 million and saved almost 700 million euros a year by 2013, France Telecom said.

France Telecom's share price has fallen 21 percent since the details of the takeover proposal were first suggested.

Posted to the site on 30th June 2008