Is France Télécom looking to buy back Wind?

9 Nov 2004

France Télécom is rumoured to be in talks with Italian power company Enel to buy Italy’s second largest telecoms group Wind in a deal worth up to EUR13 billion. Although neither company has been willing to verify the rumours, reports are circulating that representatives from both firms have met to discuss the possibility of the French operator making a ‘mid-term’ investment in Wind. Such a move would represent a U-turn for France Télécom, which sold its 26.7% stake in the Italian operator to Enel in March 2003 for around EUR1.35 billion, giving the latter full control of Wind. According to a report on Dow Jones Newswires, Paris-based financier Alain Minc and Italian adviser Guido Vitale are drawing up a proposal for the deal. Italian newspaper La Repubblica went one stage further yesterday, saying that France Télécom CEO Thierry Breton and his counterpart at Enel, Paolo Scaroni, have met several times in recent weeks to discuss the potential sale. Over the past year Scaroni has made no secret of his desire to offload Wind so Enel can concentrate once more on its core utility operations. In recent weeks Italian broadband operator e.Biscom and Italian UMTS operator H3G were also rumoured to be in negotiations to buy Wind, but this was denied at the weekend by Enel’s management.

Wind is the only telco in Italy providing both fixed and mobile services. It was established in November 2001 through a merger with Italian fixed line operator Infostrada and is now the country’s third largest cellco with 10.2 million customers at the end of March 2004, up from 9.3 million at the end of 2003, a market share of around 18%. Wind is also the largest competitor to Telecom Italia in the fixed line market with 495,000 directly connected subscribers at the end of 2003, including 141,000 broadband ADSL customers, a rise of more than 250% over the year.

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