France Telecom sells Deutsche Telekom stake

(Telephony) France Telecom announced today that it is selling its shares in Deutsche Telekom to German bank Kreditanstalt fur Wiederaufbau for about $2.76 billion.

The sale, covering about 1.8% of DT’s outstanding shares, garners France Telecom about $1.69 billion profit. The revenue made from the sale has not yet been designated for any specific projects.

According to a France Telecom spokeswoman, the company’s holdings in DT were sold because they lacked strategic value.

“France Telecom’s international strategy entails the selling of non-core assets to fund future strategic developments. Our investment in Deutsche Telekom was considered one of those non-core assets,” she said.

Despite France Telecom’s determination that a small stake in DT is non-strategic, it is keeping a small hold on Germany’s dominant telco.

Under the agreement worked out among all three interested parties, France Telecom will have the option to purchase 1.8% of DT from the carrier itself between January 2002 and January 2003, which would effectively undo the agreement announced today.

After this time has elapsed, DT will have the option to divest its holding in France Telecom. Beginning January 31, 2003, the German carrier will be able to sell its 1.8% interest in France Telecom.