Mobile deal rings up new No 2

MADRID - France Telecom has agreed to buy control of Grupo Auna's Spanish mobile unit for 6.4 billion ($11.4 billion) to become the second-biggest provider of wireless services to Europeans.

The former French telephone monopoly has offered to pay cash for 80 per cent of Barcelona-based Amena, Paris-based France Telecom said. Including debt, the transaction values Amena at 10.6 billion.

The takeover gives France Telecom's Orange mobile unit an additional 9.7 million customers, putting it ahead of Deutsche Telekom's T-Mobile in Europe.

France Telecom will now go head to head with Telefonica Moviles, Spain's biggest wireless company with a 47 per cent share at the end of June. Amena has 24 per cent of Spain's 41 million mobile-phone users and the rest belongs to Vodafone Group's local unit.

"They were lucky this came up for sale," said Franck Hennin, a fund manager at Richelieu Finance, which oversees $2.2 billion in Paris. "It's an oligopoly situation. There's very little competition on price."

The takeover is France Telecom's largest since its acquisition of Orange in 2000 for $71.5 billion.

The purchase is also the second-biggest takeover by a French company this year, behind Pernod-Ricard's planned US$17.8 billion buy of Allied Domecq.

Before the purchase, France Telecom's only business in Spain was an internet service with 1.5 million customers.

- BLOOMBERG