Incumbent Orange will not take part in any form of consolidation in the French telecoms market at present.
In a brief announcement, the operator said its conditions have not been met to engage in a merger with another operator.
Ever since Bouygues…
Incumbent Orange will not take part in any form of consolidation in the French telecoms market at present.
In a brief announcement, the operator said its conditions have not been met to engage in a merger with another operator.
Ever since Bouygues Telecom lost out to cableco Numericable in its attempt to buy number two mobile operator SFR earlier this year, rumours of a deal between Orange and the defeated bidder have made the rounds.
Stephane Richard, the incumbent’s CEO, and Martin Bouygues reportedly met several times over the past few months.
Orange subsequently confirmed it was “exploring the opportunities the changes in the telecommunications sector in France present”.
The French government, which has a 27% stake in Orange, has been pushing hard to encourage four-to-three consolidation in a very competitive industry. Mobile operators, and in particular Bouygues Tel, have seen their subscriber base erode since Free Mobile entered the market with cheap offerings for its services. Bouyues Tel recently announced it would cut around 15% of its workforce to ensure its survival.
However, talks between Orange and Martin Bouygues’ operator reportedly failed on value, with Bouygues Tel said to seek at least €8bn.
Free had earlier approached the third-largest operator with a €6bn offer, which was turned down, according to local newspapers.
Industry experts had expressed doubts about the likelihood of an Orange/Bouygues Tel deal going ahead given the antitrust issues involved. A marriage between the two would have created an entity controlling more than half of the mobile market.
To alleviate regulatory concerns, Bouygues was reportedly ready to sell its frequencies to Free for €1.8bn, in an agreement very similar to the one announced a few months ago, when the operator was looking to buy SFR.
The companies were also said to be waiting for the regulatory decision on the E-Plus/O2 merger in Germany to know which remedies they might need to implement. The German transaction received the all-clear from Brussels today subject to significant conditions.
Following news of the failed talks, shares in Bouygues, the parent of Bouygues Telecom, went down 2.25% to €28.74. They later went back up to €29.41, at the time of going to press. Orange’s shares were down 3% to €11.39.
