Orange-Bouygues merger talks stall, new deadline set

Bouygues Telecom

Orange and Bouygues Telecom will make a decision by the end of the weekend about whether they will merge, after both firms said that talks had not progressed.

Orange and Bouygues both confirmed that their boards had met separately yesterday to discuss the proposed merger, though in separate statements said that negotiations had not “progressed sufficiently” and were not yet at an advanced stage.

Bouygues said its board will meet before the end of the weekend to make a “final decision whether to pursue the merger plan or not”, while Orange said its board will also meet by April 3 to “examine the result of these discussions.”

French telco Orange and telecoms-to-construction conglomerate Bouygues have been in discussions for months about combining their businesses, and had previously set an end of March deadline to conclude the talks.

Last week, business news service BFM TV reported that the French government is ready to approve Orange’s planned acquisition of Bouygues Telecom under a deal that would see parent company Bouygues take a 12% stake in the operator.

However, it also said that Bouygues had set its sights on a 15% stake in Orange and the French government was unwilling to allow its current 23% stake in Orange drop below 20%. According to the report, the deal must also involve selling part of Bouygues Telecom’s base and assets to rival players SFR and Free to secure regulatory approval.

Orange confirmed back in January that it had renewed preliminary discussions with Bouygues Group to take over the latter’s telecom unit, claiming it was “exploring the opportunities available within the French telecoms market”.

Days later a French newspaper report claimed that Orange and Bouygues were open to including the latter’s 44% interest in leading commercial broadcaster TF1 in any deal between the pair.