As anticipated (see yesterday's EI), FRANCE TELECOM announced on Tuesday that it is buying Britian's third largest mobile operator ORANGE for GBP 26.9 billion (i.e. EUR 43.2 billion). The French operator will pay VODAFONE AIRTOUCH, the ORANGE parent company, EUR 22.2 billion in cash and 18.2 billion in new FRANCE TELECOM shares, via a capital increase reserved to VODAFONE. This includes a takeover of ORANGE's debt of EUR 2.9 billion by FRANCE TELECOM. ORANGE will be consolidated with the French operator's other mobile phone activities in a new venture called NEW ORANGE, which is expected to have some 30 million customers by the end of the year. Its pro forma consolidated turnover is around EUR 8 billion. As a result of this operation, the French state's share in FRANCE TELECOM will drop from 61% to 54% and VODAFONE will own just under 10%.