Orange close to finalising Bouygues deal

Bouygues Telecom

Orange is moving towards finalising its deal to acquire rival French multi-play operator Bouygues Telecom, with a possibility that an announcement could be made tomorrow, timed to coincide with its quarterly financials, according to French press reports.

According to reports, discussions have been held up primarily by the need to strike a deal acceptable to the regulator, meaning that some assets must be divested to rival players SFR and Free, and by the number of shares in Orange to be held by Bouygues after the acquisition is complete.

According to a report in Le Figaro, Orange is likely to take over only two million of Bouygues Telecom’s customers, while Free is likely to pay about €3 billion to €3.5 billion to secure a proportion of Bouygues’ mobile subscribers along with  part of the customer base of its Bbox internet and TV service, its network and points-of-sale. SFR meanwhile is likely to acquire now-cost mobile operation B&You and part of the BBox base for about €2.5 billion.

According to the reports, Bouygues Telecom is likely to end up with a stake in Orange in the order of 10%, less than previously envisaged because the French state is unwilling to see its stake fall below 20%.

While Orange CEO Stéphane Richard has said that consolidation is not intended to result in an increase in prices, consumer association the UFC has expressed concern that a redistribution of Bouygues’ customers base could remove the urgency for operators to compete for new customers, leading to less price competition.