France Telecom, in which the French government holds 27.4 pc of France Telecom has proposed a merger with Sweden’s TeliaSonera, hoping to crate the world’s fourth largest telecommunications operator. France’s dominant telecoms operator stopped short of a formal offer, but suggested terms that would amount to a 39 pc premium on shares of TeliaSonera based on their April 15 closing price – the day before the first information of the planned deal was published. The ‘indicative proposal’ has been sent to the board and the two largest shareholders of TeliaSonera – Swedish government which owns 37.3 pc (and has announced plans to sell its stake) and Finland’s government which owns 13.7 pc. The preliminary offer estimated at approximate $41 billion would involve a mix of cash and shares – with the cash part equivalent to 63 Swedish krona (euro6.76 or US$10.43) per share, and the stock portion based on an exchange ratio of three newly issued France Telecom shares for every 11 TeliaSonera shares. The merger, if completed, would create the world’s No 4 telecom operator, with 237 mn subscribers and holding in developed and emerging markets.
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