Orange and Bouygues Telecom officially discuss a reconciliation – Le Figaro

The two operators negotiate the terms of a merger that would value Bouygues Telecom to 10 billion euros. For the CEO of Orange, “is a matter of few weeks.” Their competitors SFR and Free will take part.

This is to avoid leaving the 8,000 employees of Bouygues Telecom in the expectation that groups Bouygues and Orange have decided to formalize the start preliminary discussions for a rapprochement between Bouygues Telecom and Orange’s largest competitor. “For me, it is a matter of few weeks. One month, two months, it will probably not go much beyond, said Tuesday Stéphane Richard, CEO of Orange, on RTL. If there should be reconciliation, it would not result in higher prices. ” And promise “that there will be absolutely no one along the road or on the side of Bouygues Telecom and a fortiori nor employees of the Orange side. Orange will never engage in a transaction that is not socially irreproachable. ”

No schema is stopped again and the two groups do not set a timetable to reach agreement. But the principal terms of a potential transaction on the table. Martin Bouygues, CEO of the eponymous group and founder of the telecom subsidiary in 1994, the important thing is that the group “consolidates its sustainable anchoring in telecoms”. Clearly, Martin Bouygues refused to sell altogether its Telecom subsidiary patrick drahi owner of SFR in June to $ 10 billion. Today, he agrees to provide Bouygues Telecom with Orange, for the same valuation as that proposed by SFR, and get in return a “significant portion” of Orange’s capital. Allowing it to remain a shareholder of the future new group will further strengthen its leadership in the sector.

Stéphane Richard, CEO of Orange, is clear. His group has no economic need to participate in the industry consolidation. But as a leader, he must take responsibility if market conditions actually pushes for consolidation. Orange will be attentive to creating value for its shareholders, customers and employees.

The principles of valuation at 10 billion euros and partial payment in Orange shares are prerequisites for any potential transaction . Now we will have to agree on modalities. The State of Orange which owns 23%, is considering favorably the operation. But not in any condition. Impossible that the Bouygues group meets shareholder at par with the state. Many voices are being raised to say that Bouygues will never get 15% stake. The balance would fall instead of 10% to less than 15%, which is equivalent to 4-6000000000 euros. If operation there, Orange will pay the cash balance.

For both find the money and for competitive reasons, Orange will have to bring Free and SFR in discussions to Bouygues Telecom to sell assets such as the mobile network, part of the customer base or network of boutiques. In fact, the current scope of Bouygues Telecom would end up broke out between its three competitors.

Exactly four years after the thunderous arrival of Free Mobile in the market, the government is concerned about the capacity of the four actors cope with mountains of investment needed to develop Internet high speed fixed and mobile. Therefore, it now looks for a consolidation of the sector with the reduction from four to three operators in the market. The Competition Authority has always stated its preference, in principle, for increased competition with four operators. But it will examine pragmatically, the conditions of the disappearance of an actor.