France Telecom reached a preliminary accord to buy out most of Egyptian tycoon Naguib Sawiris' stake in their jointly owned telecom operator Mobinil, in a deal that will see the French group pay out about 1.5 billion euros ($2 billion).

France Telecom was already the biggest shareholder in Mobinil, and Egypt is a key part of its effort to expand in high-growth emerging markets in Africa and the Middle East.

The new accord simply accelerates the expected exit of Sawiris, who had a put option to sell out to France Telecom starting in September 2012.

The two sides were in talks in recent days over the terms of the put option because it ascribed a much higher value than Mobinil's current market valuation, which has shrivelled after Egypt's revolution paralyzed much of the economy.

Under the terms of the accord, which still needs regulatory approval, France Telecom will buy Sawiris' stake for 202.5 Egyptian pounds per share.

Then it will make a tender offer at the same price to the minority shareholders of the listed portion of Mobinil, known as ECMS.

Afterwards, France Telecom would end up owning 95 per cent of Egypt's largest mobile operator if all the minority shareholders were to accept, while Sawiris would keep 5 per cent.

The price offered by France Telecom represents a 48.5 percent premium over the ECMS closing price on Thursday of 136.37 Egyptian pound per share.

It represents a discount of nearly 8.7 per cent from the initial price set out in Sawiris' put option that called for France Telecom to pay 221.7 pounds per share in September, rising later to 248.5 pounds per share.

France Telecom had already set aside 1.9 billion euros in its accounts in anticipation of buying out Sawiris under the put option, according to analysts. The new deal means that it will end up paying out some 200-250 million euros less than it had previously planned.

Mobinil, which is Egypt's largest telecom company, was the subject of a drawn-own legal fight between Sawiris and France Telecom several years ago that ended in April 2010 with a new shareholders' agreement.

Under the settlement, Sawiris won put options to eventually exit the company by selling to France Telecom.

For France Telecom, Mobinil is part of its effort to expand its footprint in high-growth emerging markets to offset tough competition in its home market. Egypt, where it competes with Vodafone's local unit, represents one of France Telecom's biggest emerging market bets.

The French group has also expanded in about 20 other African and Middle Eastern countries including Tunisia, Morocco, Iraq, Senegal and the Ivory Coast.

Sawiris, at 57 one of Egypt's richest men, has eased off day-to-day management of his empire after selling assets including Italian operator Wind and his most lucrative business, Algeria's Djezzy, to Vimpelcom in a deal worth $6 billion.

Much of his time is now spent in politics - he has been one of Cairo's most outspoken business personalities on issues such as political reform and media freedoms since the revolution.

Last year he co-founded the liberal Free Egyptians party which took on the powerful Muslim Brotherhood in a parliamentary election.

But Sawiris isn't totally out of the deals game: in early February, he told Reuters he would consider buying established telecoms businesses or network operating licences in Europe, the Middle East and Africa.

Sawiris and Austrian investor Ronny Pecik have built a stake of 20.1 per cent in Telekom Austria via shares and options, and Sawiris recently lost out on bidding for France Telecom's Swiss business, a deal won by private equity firm Apax.

Shares in France Telecom were up 0.4 per cent to 11.30 euros at 955GMT, largely in line with the French blue-chip index .

Shares in ECMS and Sawiris' holding OTMT were suspended. – Reuters