France’s Orange expects it will take “at least several” more weeks to agree a deal to buy smaller rival Bouygues Telecom as negotiations are proving difficult, according to the incumbent’s CFO Ramón Fernández.
France’s Orange (EPA:ORA) expects it will take “at least several” more weeks to agree a deal to buy smaller rival Bouygues Telecom (EPA:BUOY) as negotiations are proving difficult, according to the incumbent’s CFO Ramón Fernández.
Fernández (pictured) was cited telling journalists today that while there is “a collective will to find a solution” in the local telecoms sector, such things take time.
“Finding a deal means settling on a structure that four players are satisfied with,” he was quoted saying.
Orange CEO Stephane Richard told BFM Radio that, given the size of the transaction and the fact it will be game-changer for the local telecoms market, a solution will ideally be found within two months.
Orange confirmed in early January that it was in M&A talks with Bouygues.
Local press valued the deal at €10bn (US$10.8bn), comprising €2bn (US$2.2bn) in cash and a 15% stake in Orange worth €8bn, plus disposals worth €5bn (US$5.4bn).
The price represents more than 13x Bouygues Telecom’s estimated €750m FY 2015 EBITDA.
Together, the companies have a mobile market share of 59%.
In late January, a newswire report said French competition authority l’Autorité de la Concurrence would review the deal if the two were to reach an agreement.
By late January, Orange had started informal talks with Iliad and Numericable-SFR with regard to their possible interest in disposals that could include spectrum, customers, shops and network infrastructure. Key areas of interest to regulators will be Bouygues’ B2B customers, it is thought, while its B&You no-contract brand could also be sold. Orange’s low-cost brand Sosh could also be sold.
Iliad is most likely to be interested in network, especially given Arcep’s call for an end to roaming deals, as well as spectrum. SFR meanwhile would eye B2B and some spectrum.
Advisers had previously pitched a split sale of Bouygues Telecom’s network and services businesses to Iliad and Numericable-SFR.
It is furthermore thought likely that officials would try to encourage an existing MVNO to develop its business – but not try to create a new mobile network operator – while also imposing capex requirements on Orange/Bouygues, SFR and Iliad to ensure network investment.