GTS, a pan-European telecoms provider which employs more than 50 people in Dublin and Cork, has been acquired by KPNQwest for €645 million (£508 million). The deal, which has the backing of GTS bondholders, will affect its shareholders and is expected to result in 1,000 job cuts worldwide. KPNQwest, a joint venture between Dutch KPN Telecom and Qwest Communications International, will issue €210 million of new convertible bonds and assume about €435 million in net bank debt to fund the transaction.

It remains unclear how the transaction will affect GTS's central accounting facility in Cork. The firm established a shared services and finance operation last year at the airport business park in Cork, which was expected to employ 70 people.

A GTS spokesman said yesterday there would be job losses but there had been no decisions yet where these would occur. The company, which ran into severe financial difficulties earlier this year, recently pulled out of a proposed data centre investment in Dublin.

GTS was one of the first companies to begin investing heavily in fibre optic telecom networks across Europe, but has been hit hard by a glut in capacity. Earlier this year the company put its Central European telecoms business up for sale, attracting interest from Dublin-based operator, eTel. GTS chief executive, Mr Robert Amman said ordinary shareholders would get nothing from the deal, as the consideration was far less than the company's outstanding bond liability.