Around the world, privatization remains all the rage.

Back in September, we saw Taiwan complete its privatization of Motley Fool Income Investor pick Chunghwa Telecom (NYSE:CHT), floating $2.56 billion worth of American Depositary Receipts. Last week, Switzerland announced its intention to follow suit and divest itself of perhaps its entire stake in Swisscom (NYSE:SCM), the national telephone company in which, according to Capital IQ, the Swiss government still owns a 62.7% stake.

The reason, according to a Financial Times report, is almost entirely mergers-and-acquisitions-based. Last year, Swisscom was a leading contender to acquire next-door neighbor Telecom Austria (NYSE:TKA). However, the deal fell through because it ran counter to Austria's own aim to reduce state involvement in industry. Austria had recently exited its stake in Telecom Austria, and the prospect of putting ownership of the company right back in the hands of another government just didn't seem appealing.

Today, Swisscom is interested in acquiring a pair of somewhat more distant targets: Ireland's eircom Group and Denmark's TDC (NYSE:TLD). The Irish deal seems more likely, as eircom's $2.1 billion in annual sales makes it a more easily digestible target for Swisscom, which has $8.8 billion in sales. Meanwhile, Swisscom's interest in acquiring TDC, while widely rumored, has not been confirmed. Given that TDC's $8.2 billion in sales would make this more a merger of equals than an acquisition, one can see why an outright confirmation of any possible deal might be off-limits for the time being.

The difference between the two potential deals looks even more striking from a valuation perspective. Judging from the current value of its roughly one-third float, a Swisscom privatization might value the entire company at $19.4 billion. True, that would make the $11 billion market cap sported by the near-same-sized TDC look tempting. But eircom carries a market cap of just $1.7 billion, giving that potential deal a price tag of just 0.8 times sales, vs. a TDC merger at 1.3 times sales.

Whatever the price tag, and whichever the deal, Swisscom needs to get itself privatized before it starts announcing acquisitions, unless it wants a repeat of last year's snag. If it is able to overcome local concerns -- a privatization would likely have to pass a Swiss referendum, and might also require amendment of the country's telecom laws -- Swisscom could proceed with an eircom acquisition. With has $2.4 billion in cash on hand, it could afford a decent premium to eircom's market price. A TDC acquisition would likely have to involve new stock issuance, however; Swisscom simply lacks the scratch to pay for it today.

Fool contributor Rich Smith owns no shares in any of the companies mentioned in this article.