News
French telcos reportedly aim to finalise deal on Thursday but several hurdles remain.
Orange and Bouygues are holding separate board meetings on Wednesday to discuss the former’s acquisition of Bouygues Telecom, in a bid to reach a deal by Thursday’s self-imposed deadline.
This is according to sources in a Reuters report on Tuesday who claimed that there are still several unresolved issues, including financial terms, and the sale of certain Bouygues Telecom assets to rival French telcos Iliad and SFR in a bid to appease antitrust watchdogs.
Sources cited in a separate report by Bloomberg said there are still uncertainties about how big a stake in Orange will be retained by the French government. The sources warned that despite several months of negotiation, talks between Orange and Bouygues could still not lead to a deal.
In early February, Orange CEO Stephane Richard said there is a 50:50 chance of a deal emerging.
After months of speculation, Orange and Bouygues Telecom revealed in January that they had entered into merger talks.
Various sources have put the value of any deal at around €10 billion, with Bouygues receiving an Orange stake worth €8 billion and the remainder in cash.
There are also antitrust issues to consider, given that a merger will reduce the number of mobile operators in France to three from four.
A tie-up between Orange and Bouygues will be scrutinised by France’s competition watchdog, the Autorité de la Concurrence rather than the European Commission.
Orange’s chief financial and strategy officer Ramon Fernandez told Total Telecom at this year’s Mobile World Congress that he expects domestic authorities to be as vigilant and scrupulous as Brussels, and that if a deal goes ahead, Orange will immediately look to divest customers, parts of the network, and spectrum.
