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France Telecom announced that it is acquiring a stake in Iraq's third-largest mobile phone operator Korek Telecom.
France Telecom will pay US$245mn for its 20 per cent indirect stake in Korek which will give the gaint telecoms company a foot hold in one of the regions fastest growing mobile markets.
"The acquisition of this stake in Korek Telecom is a new step in our policy of expansion outside Europe, and contributes to our stated aim of doubling our revenues in Africa and the Middle East by 2015," France Telecom Chief Executive Stephane Richard said in the statement.
France Telecom's stake is part of a joint venture with Kuwaiti logistics group Agility, which will take a 24 per cent stake, both companies said in a statement. The joint venture will be the method by which both companies control the overall stake, with Agility controlling 54 per cent of the joint venture
France Telecom will pay US$245mn for its share and will also extend a US$185mn four year shareholder loan to the Iraqi operator who acquired the third national licence in 2007. Agility will contribute existing convertible debt and inject an additional US$50mn for its stake.
If the deal proves worthwhile France Telecom has an option to increase its stake to 27 per cent in 2014 and up to 51 per cent, which is the maximum allowed under Iraqi law, by 2016.
But France Telecom's stake in Korek does rule it out of bidding for any future national mobiles licences. The Iraqi government is considering selling a fourth licence later this year.