France Telecom will sell its mobile phone operator Orange Switzerland to private equity group Apax Partners for about 1.6 billion euros ($2.09 billion), as Europe's fourth-largest telecoms operator refocuses on its core markets.
The deal is a glimmer of hope in what has otherwise been a drought in European private equity deals as the region's sovereign debt crisis has driven up the cost of borrowing money for such transactions.
Some bankers had voiced concern France Telecom might abandon the sale process if bids came below expectations due to the high price of financing. European buyout deals all but ground to a halt in the second half of the year, with many pulled or postponed.
Apax, which announced the deal late on Friday, said the transaction, subject to approval by regulators, will be submitted to France Telecom's board in January.
As part of a broader portfolio review, France Telecom had been seeking to exit Switzerland where it is the third-largest player with about a 17 percent market share.
France Telecom, whose key markets aside from France are the UK, Poland and Spain, is also trying to sell its Austrian unit. It is also reviewing operations in Africa and the Middle East as well as its enterprise unit.
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