PARIS-French company Bouygues Group, which operates France’s smallest mobile operator, announced plans to buy 16 percent of its telecom subsidiary from Germany utility Eon for $1.2 billion, increasing Bouygues’ stake in Bouygues Telecom to between 80 and 83 percent from its current 67.1 percent.
The deal is structured in two phases. The French company will first buy 5.8 percent for about $426 million and then exercise an option to buy the remaining 10.1 percent for about $714 million between April 2003 and October 2005. If the option is not exercised, Eon can sell its Bouygues Telecom stake between October 2005 and February 2007.
The deal includes about $150 million in shareholder loans, Eon said.
The deal is part of Bouygues’ strategy to increase its holdings in the telecom business, and part of Eon’s strategy to divest noncore assets.
