The target operation provides consulting, network integration and data center services to clients in both the French commercial and government sector. It has 1,360 employees and made an operating loss on full-year 2006 revenue of 137.7m euros ($190m).

CS Communications & Systemes said it has given BT exclusive rights to negotiate a takeover until the end of November. The two companies will also start talks with local councils over the potential impact of the deal on the workforce.

This is the second time that BT has attempted to build its services capabilities in France in the last 12 months. Last November, it made a failed attempt to acquire network services firm Prosodie.