British Telecom and Vodafone Air Touch are close to agreeing to increase their stakes in Airtel, the second-largest mobile phone group in Spain, rather than compete against each other.
The deal would give them joint control of Airtel. The Spanish mobile phone market is seen as one of Europe's fastest-growing areas, and Airtel, which has a fractured shareholder base, is one of the few European mobile groups without a distinctive proprietor. Both BT and Vodafone had made separate all-share offers for Airtel. BT's valued the Spanish business at £26.4 billion sterling against a £24 billion bid by Vodafone.
Banco Santander Central His pano (BSCH), the Spanish bank which intends to dispose of its 30.45 per cent stake in Airtel, also has an agreement with four regional banks giving it influence over the destiny of a further 13.3 per cent.
Although BSCH is keen to sell its stake to the highest bidder, BT is believed to have invoked a shareholder agreement binding Vodafone to a core group of controlling Airtel investors.
The agreement states that should BT or Vodafone acquire any additional equity in the group, it must share this with its rival.
