(Associated Press via NewsEdge) Belgium's biggest telephone company, Belgacom has agreed to buy Vodafone Group's 25% stake in Proximus for 2 billion euros ($2.6 billion), giving it full control of the mobile operator.
Belgacom said it expected the deal would add 6% to 7% to next year's earnings, citing 'significant synergies' and tax savings as it struggles with falling revenue from its main market, traditional telephone calls.
It said it would finance the buyout with a bridge loan in the short term and a possible bond offering in the long term.
It will also use the 67 million euros ($86 million) it will receive by selling off its 5.8% stake in French telecom firm Neuf Cegetel. France's second largest mobile operator, SFR, has agreed to but Neuf Cegetel in a decision announced earlier.
Belgacom said these deals were part of its plan to focus on its core market, saying it would continue to roll out new services such as digital TV and broadband Internet in Belgium.
Analyst Dirk Saelens who covers Belgacom stock for KBC Securities told Dow Jones Newswires that both deals were positive news. The price paid for the Proximus stake 'is not cheap, but it's a good move and still earnings enhancing,' he said.
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