Sullivan & Cromwell is advising France Telecom on its E3.9bn (£2.62bn) takeover of Wanadoo, securing the New York giant its second headline M&A deal in the resurgent Paris market.

The firm is representing long-term client France Telecom as it attempts to secure a publicly-held 29% stake of Wanadoo for £2.62bn to give the company a controlling stake in the internet service provider.

Sullivan's team is being led by Paris-based partners Nikolaos Andronikos and Gauthier Blanluet, with Bredin Prat senior partner Didier Martin advising Wanadoo.

Skadden Arps Slate Meagher & Flom Paris head Pierre Servan-Schreiber is representing the French Government – France Telecom's largest shareholder – as well as the financier of the deal, Societe Generale.

The agreement is the second significant M&A transaction to hit Paris in the last month, following January's E48bn (£33bn) hostile bid by Sanofi-Sythnelabo for pharmaceutical rival Aventis.

Sullivan scooped the role defending Aventis in the on-going bid, which has sent shock waves through the French business community, with the US firm acting alongside Bredin Prat name partner Jean-Francois Prat.

The instructions follow a string of high-profile representations for Sullivan in the firm's US M&A practice, including most recently acting as co-counsel on Cingular Wireless' $41bn (£21.5bn) take-over of AT&T Wireless this month.

The high profile deal, which is part of a bold restructuring programme at France Telecom designed to counter the threat of internet telephony, is expected to be followed by an initial public offering (IPO) of Wanadoo's yellow pages company, Pages Jaunes. The float is expected to raise E3bn (£2.01bn).

The sale of the highly-rated Wanadoos, which owns the UK's Freeserve, is already being touted as a bellwether for the telecoms sector and the Pages Jaunes float is expected to act as the first real test of returning confidence in French capital markets.

Hopes for a market recovery have already been raised by last month's E105m (£71.9m) IPO of internet service provider Free, on the Premier Marche of Euronext Paris.

Click on 'e-mail news' at www.legalweek.com to be alerted to breaking news stories.