The CEO of Orange has said that Spain is the country where his company is concentrating its search for acquisition targets.
Speaking at a conference in Aix-en-Provence at the weekend, Stephane Richard said that Orange was looking at consolidation…
The CEO of Orange has said that Spain is the country where his company is concentrating its search for acquisition targets.
Speaking at a conference in Aix-en-Provence at the weekend, Stephane Richard said that Orange was looking at consolidation opportunities in Spain, Poland, Romania and Belgium, though no talks were taking place.
The admission follows the incumbent’s disclosure last week that it will not take part in any form of consolidation in the French telecoms market at present.
However, Richard said the door to do a deal with Bouygues – with whom it previously held talks – was still open, although his company would not be taking the lead.
Richard told Reuters that above all Orange was looking at Spain. As Vodafone’s €7.2bn (US$10bn) purchase of cableco Ono was gathering pace earlier this year the French incumbent was said to have mandated BofA Merrill Lynch to examine potential targets in the country.
Orange was thought to be interested in both triple-play operator Jazztel and TeliaSonera’s budget mobile operator Yoigo.
Jazztel has a market capitalisation of €2.7bn (US$3.7bn) while TeliaSonera previously conducted a sale process for Yoigo but no bidder was willing to match its €1bn (US$1.4bn) valuation.
It has been strongly suggested that Yoigo is once again up for sale after Spain’s number four mobile operator was not included in TeliaSonera’s new “three pillar” plan announced in April.
At the time Nomura analyst James Britton said that the market “will view the omission of Spain from the strategic statement as tantamount to putting the asset up for sale”.
TeliaSonera’s CEO Johan Dennelind said that the small market share of its Spanish mobile unit, Yoigo, was not sustainable in the long term and that they either needed a pathway to growth or to exit the country.
The European Commission’s recent decisions to allow consolidation in Germany and Ireland’s mobile markets, which leaves the countries with three network operators, sets a precedent for Yoigo to be absorbed into one of Spain’s big three operators.
An acquisition of Jazztel would represent a convergence play and a way to regain ground over Vodafone, following its acquisition of Ono, and Telefonica, which is paying more than €1.1bn to absorb pay-TV operator Canal+.
