France Telecom is to combine its Global One corporate telecoms operation with Equant, in a deal which will create a data and IP communications company serving 3700 large business customers.
The combined operation is aiming for a 20% market share in Europe for Internet protocol-based communications and managed data networks by 2004. Under the terms of the deal, France Telecom will acquire 80.6 million new Equant shares in return for Global One's data business and $300 million in cash.
The deal revives a long-standing interest in the Dutch-based telecoms firm by France Telecom which has promised to invest $1 billion in the new business. The merger is expected to deliver "substantial" revenue synergies and annual operating cost savings of $300 million by the third year.
The transaction excludes Global One’s card and carrier voice businesses, which will be retained by France Telecom. Corporate value-added voice services will be provided to customers of Equant/Global One on an agency basis says the French carrier.