September 7, 2010 / 6:49 AM / in 10 years

UPDATE 2-France Telecom says no plans for D.Telekom merger

* Union concerned about Deutsche Bank’s France Telecom stake

* Union calls for meeting with France Tel management

* Deutsche Bank stake falls to 3.25 pct -AMF

(Adds detail on D.Bank stake)

PARIS, Sept 7 (Reuters) - France Telecom FTE.PA said it had no plans to merge with German rival Deutsche Telekom (DTEGn.DE), responding to union concerns after Deutsche Bank (DBKGn.DE) temporarily raised its stake in the French group.

The CFE-CGC/UNSA union said on Monday the German bank’s move to boost its holding to over 5 percent represented a “profound change in the current balance of the shareholding” and was “perhaps a precursor to consolidation operations”.

Deutsche Bank’s holding reached 5.07 percent on Aug. 25, but fell to 3.25 percent on Aug. 31, the AMF French stock market watchdog said in a notice on Tuesday.

A spokeswoman for France Telecom said on Tuesday the two telecom operators discussed specific topics as the need arose, such as the combination of British units Orange UK and T-Mobile UK late last year.

“There is no plan to bring together France Telecom and Deutsche Telekom,” the spokeswoman said.

The CFE-CGC/UNSA union called for an extraordinary meeting with management and said: “The company’s employees want to know the shareholder structure and the steps the company’s management intends to take to protect France Telecom’s independence.”

The French state owns 13.47 percent of France Telecom, according to the Economy Ministry’s website. The state FSI strategic investment fund holds 13.67 percent.

Deutsche Bank declined to comment.

France Telecom has set out a strategy to offset sluggish demand and tough competition in European markets by focusing on growth in emerging regions. It aims to increase customers to 300 million worldwide in the next five years, mostly via acquisitions in emerging markets. [ID:nLDE664028] (Reporting by Cyril Altmeyer and Julien Ponthus in Paris, Nicola Leske in Frankfurt; Writing by James Regan and Helen Massy-Beresford; Editing by Hans Peters, Mike Nesbit)

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