Thursday, November 24, 2005

Swiss Federal Council to Block Swisscom-Eircom Acquisition

Switzerland's Federal Council has instructed its representative on the Board of Directors of SwissCom to vote against the company's proposed acquisition of Eircom, the incumbent telco in Ireland, and other possible acquisitions that Swisscom might make abroad. Market observers believed that Swisscom might have been contemplating a bid for Tele Danmark (TDC). Instead, the Swiss government is encouraging SwissCom to distribute available capital to its shareholders.

The Swiss state holds approximately 66% equity stake in SwissCom. In a statement on Thursday, representatives of the government's finance and communications ministries also said the state would sell additional shares in Swisscom, encouraging the move toward privatization.

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