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France TéLéCom Gives Up on TeliaSonera Merger

By Mikael Ricknäs

June 30, 2008 — IDG News Service —

France Télécom has withdrawn its offer to acquire telecommunications operator TeliaSonera. The companies were unable to agree on price, France Télécom said Monday.

A merger between France Télécom and TeliaSonera would have created a "world leader," France Télécom said, but it downplayed the repercussions of the failed negotiations, saying that the merger was not essential to its strategy.

TeliaSonera is still on the market, with the Swedish government keen to sell the 37.3 percent of the company it owns.

However, the company won't say whether it is in talks with other possible buyers, a spokeswoman said Monday.

One possible suitor is Norwegian operator Telenor. In late April, Swedish newspaper Svenska Dagbladet reported that Telenor had hired Nordea and JPMorgan Chase to evaluate a possible deal.

Rumors that TeliaSonera was considering a merger with France Télécom first surfaced in April, and on June 5 France Télécom made an official bid, offering about 252 billion Swedish kronor (US$41.8 billion) in cash and shares. The offer was immediately slated by TeliaSonera Chairman Tom von Weymarn, who said it significantly undervalued the operator.

After that shaky start, France Télécom said it would negotiate for two weeks, which turned into three, but to no avail. TeliaSonera's board said Monday that the offer was not significantly improved and still undervalues the company.

As stock markets opened on Monday, TeliaSonera shares dropped in price, while France Télécom shares rose.

 

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