British mobile operator Vodafone has agreed to acquire Eircom's mobile division Eircell for 4.5 billion euros, including 250 million euros of debt.
Eircom also announced today that it had rejected as too low a bid by Denis O'Brien's e-Island consortium for its fixed line business.
Under the Vodafone deal, Eircell will be demerged into a new company, Eircell 2000, which will then be acquired by Vodafone. Eircom shareholders will receive one Eircell 2000 share, valued at 1.91 euros, for every Eircom share.
Shareholders will then receive 0.9478 Vodafone shares for every Eircell 2000 share, valuing Eircell at 4.2 billion euros, based on Vodafone's share price of £2.45 sterling at yesterday's close of business.
The deal is subject to approval by shareholders at an EGM expected to take place in March.
* Dutch telecoms operator KPN, which holds a 21% stake in Eircom, has welcomed the deal as part of its plan to exit the Irish company. Swedish operator Telia, which holds 14%, is also backing the deal, and has agreed not to sell any of its Eircom shares for a period of 90 days after the demerger is completed.
