has agreed to acquire 28.5% of Germany's
for 3.74 billion euros ($3.6 billion), enabling the former French monopoly to make a long-awaited entry into Europe's biggest market.
Under the terms of the agreement, France Telecom, based in Paris, will buy 18.6 million shares of MobilCom at 201 euros a share, 1 euro more than MobilCom's closing share price Wednesday.
Together, the two companies will form a joint venture that will bid for a UMTS 3G mobile license in Germany, a universal mobile telecommunications system that allows for faster Internet access.
Last year, France Telecom's attempt to buy
, a German wireless company, was blocked.
Gerhard Schmid, founder of MobilCom and chairman of its executive board, will remain the company's largest shareholder, with a 40% stake, and continue as head of the board. France Telecom will not increase its stake for the moment but does have the option of acquiring shares from Schmid in the middle of 2003.
In the near term, MobilCom, the third-largest long-distance phone company in Germany, will continue to be listed on the German
. The company, based in Schleswig, operates mobile and fixed telecommunications services in Germany and also owns Internet service provider
In Wednesday trading, shares of France Telecom's American depositary shares closed at 177, down 6 1/4, or 3%. In midday trading on the Paris bourse, France Telecom shares were up 1.6 euros, or 1%, to 179.6 euros. Meanwhile, MobilCom shares were down 22.5 euros, or 11%, to 175 euros on the Frankfurt stock exchange.