S&P: France Telecom unaffected

Standard & Poor's said that its ratings and outlook on France Telecom SA (BBB+/positive/A-2) remain unchanged following the announcement by the group of its proposal to acquire full ownership of Netherlands-based Equant through the acquisition of substantially all of the assets and liabilities of Equant for a cash consideration of €564 million.

France Telecom currently owns 54.2% of Equant, its nondomestic wireline subsidiary. The proposed transaction would allow France Telecom to gain control of the 45.8% portion of Equant it does not hold.

S&P noted that the transaction only marginally delays France Telecom's deleveraging plan. And S&P believes the impact of the proposed transaction on France Telecom's credit ratios and financial targets - and, therefore, the ratings - will not be significant, despite the financing needs of Equant, which will be assisted by a $250 million credit facility from France Telecom.

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