Under terms of the deal, existing shareholders will be bought out for 1.4bn euros ($1.87bn). France Telecom already owns 17.45% and, with the reimbursement of a shareholders loan, it will end up with a 35% stake while Mid Europa Partners will have the remaining 65%.
France Telecom emphasized that the deal will not lead to any cash outlay and not have any impact on its net debt ratio targets. It said the partnership between the two investors constitutes a new approach of cooperation between an operator and a private equity fund.
However, by giving up 65% of the increase in value that it hopes to get through the Orange brand name and expertise, France Telecom has been forced to recognize that its high level of debt makes even modest acquisitions impossible.
One, which was established in 1995, is the third largest mobile phone operator in Austria with a 20% market share. Its 1.8 million customers gave it revenue of 633m euros ($850m) last year.
