Vodafone today announced the sell off of its subsidiary Orange to France Telecom. Vodafone Airtouch plc had to sell Orange to win regulatory approval for its purchase of Germany's Mannesmann, has created the second largest European mobile phone company. The French company is paying £13.8 billion (sterling) in cash and £11.3 billion in France Telecom shares. As a result, the French government will reduce its stake in its leading telecoms operator to 54 percent from 61 percent.
In a major coup for Orange's ambitious Chief Executive Hans Snook, the new company will retain the Orange name and will be run by Mr Snook and his right hand man, Orange's deputy CEO and Finance Director Graham Howe. The French giant is paying around 6,741 euros per customer in a deal that will see Vodafone take just under 10 percent of France Telecom in non-voting shares.
The French operator is planning to recoup some of its outlay in the relatively near future. The company expects to list 10-15 per cent of "New Orange" in London, Paris and New York in the fourth quarter of 2000 or in early 2001. France Telecom said it would use the proceeds from the listing of Orange to repurchase up to 8.4 billion pounds of the France Telecom shares held by Vodafone, which is not allowed to dispose of any stock for six months after issue.
Reports in a weekend British newspaper that Vodafone Airtouch was considering a move to Dublin to avoid tax changes in the UK have been downplayed by the IDA. The company had cited the low corporation tax rates here and UK social insurance payments as reasons to move here.
