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French on Course for Nordic Deal
(21 Apr 2008, BWCS Staff)Rumours about an upcoming take-over of TeliaSonera by France Telecom gained ground over the weekend as the head of the Swedish-Finnish telco seemed to endorse the idea. Speaking to Swedish newspaper Svenska Dagbladet, TeliaSonera chairman, Tom von Weymarn, said the geographic fit between the Nordic operator and France Telecom was "perfect". Von Weymarn claimed that "Our footprints on the different markets are in no way overlapping, so geographically the fit is perfect."
According to von Weymarn the combined seize will help both operators. As he put it, "if one is to, in the long term, maintain global competitiveness, then size will be important. The Swede's words echoed the enthusiasm of France Telecom's Chief Financial Officer Gervais Pellissier who last week admitted that France Telecom was indeed keen on the deal. However, Pellissier told journalists that his company did not intend to return to the "reckless" merger-and-acquisition strategy of the early part of this decade.
In particular, the CFO underlined that the French company would not allow its ratio of debt to earnings before interest, tax, appreciation and amortization to go beyond 2.5 and would aim to bring it back to two within three years, in case of a deal.
The Swedish company has a market value of roughly US$38 billion and Pellissier said France Telecom would pay for any deal of this size with a combination of cash and shares.
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