The deal that would have been France Telecom’s biggest acquisition since purchasing Orange in 2000 went south today. France Telecom was prepared to buy out Swedish Telecom company TeliaSonera for $42 billion, but with the Swedish government having a 37% share in the company, somehow the deal flopped. Insiders tell us that the deal fell through as a result of the TeliaSonera board of directors and the Swedish government deciding that the offer of $42 billion was a severely undervalued. What really makes this news suspicious is that FranceTelecom’s CEO was not the least bit shocked which suggests the offer was in fact undervalued.
It looks like acquiring a Telecom where the local government is a major shareholder poses non-economic conflicts of interest. Combine the non-economic factors with a hostile acquisition and we have ourselves a problem. Maybe next time France Telecom, but this time bring a larger check book.
