France Telecom in Takeover Talks With MTS
Sistema currently owns nearly 53 percent of MTS, which operates in Russia (where it is the mobile market leader), Ukraine and a number of other Eurasian markets. Almost 47 percent of MTS's stock is publicly traded, and, not surprisingly, the share price has risen as a result of the speculation: It is currently at $14.44, having started the week at $14.22, but had been as high as $15.08 Thursday.
Such a deal would be massive. MTS has more than 106 million mobile customers, plus 2 million fixed broadband and 2.6 million pay-TV customers, and generated revenues of US$3.13 billion and net income of $367 million in the second quarter of this year. (See MTS Reports Q2.)
France Telecom, meanwhile, has more than 158 million mobile customers globally and generated revenues of €11.34 billion (US$15.65 billion) and operating cash flow of nearly €2.5 billion (US$3.45 billion) in the second quarter.
A stock swap of this magnitude would be unparalleled, but would fit with France Telecom's strategy to develop its global presence through investments in emerging markets. (See FT Unveils New Action Plan.)
— Ray Le Maistre, International Managing Editor, Light Reading