Orange and Bouygues bury their wedding plans – Le Figaro

INFO LE FIGARO – Both groups ended their discussions. The requirements of the State as shareholder and the risks in terms of the competition were right project.

The acquisition of Bouygues Telecom Orange will not happen. After a final meeting earlier in the afternoon between Stéphane Richard CEO of Orange and his counterpart Martin Bouygues, the two groups met on Friday evening their respective boards of directors, for the third time in three days. As revealed lefigaro.fr, they endorsed the project failure. It’s the end of three months of almost uninterrupted negotiations between the leaders of four French telecom operators, Bouygues Telecom, Orange, SFR and Numericable Iliad owns Free. “In a market where the assumption of consolidation is now permanently excluded, Bouygues Telecom will continue to stand alone strategy,” said Bouygues.

Ten days ago, however, the parties were well some have done the hard part. The division of Bouygues Télécom, on the basis of a valuation of 10 billion euros, between Orange, SFR and Free was stopped and the prices of various assets accepted, not without difficulty, by the buyers. The operation, called “Jardiland” by many bankers and lawyers who worked there seemed so well underway. The aim was to conclude no later than March 31.

But the mechanical crank was Thursday, March 24, in the office of Emmanuel Macron in Bercy. The Minister of Economy and Martin Vial, the head of the Agence des participations de l’État (APE), which owns 23% with BPIfrance Orange capital, expressed three unacceptable demands by Martin Bouygues. They thus conditioning the entry of Bouygues in the capital of Orange at a floor price of 18.5 euros per share while the parties were negotiating until then to 17 euros (the share price was 15.40 euros on the stock exchange Friday). By increasing the price of Orange, Emmanuel Macron has automatically reduced the value of Bouygues of over 10%. “In view of the creation of value would have allowed the transaction to each party, the financial conditions imposed by the EPA were not unacceptable,” are we to judge Bercy.

“In light of the creation of value would have allowed the transaction to each party, the financial conditions imposed by the EPA were not unacceptable”

Two other clauses remained in the craw of the businessman: the prohibition for 7 years for Bouygues to climb to the Orange capital and a fee freeze Double voting for 10 years. “We have been consistent in our positions,” says one at Bercy. “On one hand, we want the commitments in terms of prices, employment and investment. On the other hand, as a shareholder, the State was legitimate to protect its interests. ” Emmanuel Macron, therefore no question that the state loses its blocking minority in general meeting. But for Martin Bouygues, it was unacceptable to be relegated to a minority shareholder position and no influence at Orange. A scenario incompatible with his desire to continue, through a stake in the incumbent operator, its history in telecommunications began there more than twenty years.

From the Easter weekend, marked by three days of intensive negotiations, the decision of Martin Bouygues was perhaps already taken. Friendly pressures including the Elysée and Matignon to invite him to make an effort, have not varied. Manuel Valls was even asked to meet with the CEO of the Orange and Bouygues to attempt a final mediation. It will not happen

It should be said that another serious difficulty mortgaged negotiation. The risk of derailment of the operation to the Competition Authority. The three buyers of Bouygues Telecom, and the seller had to agree on the management of each of the cost of each of the facilities – the famous “cures” – might have required the competition watchdog.

Finally, these discussions have been made difficult by the existing tensions between the different actors, particularly between Martin Bouygues, and Xavier Niel.

With this failure, the battle between operators should flare. If customers can be welcomed, the companies and their employees may suffer because the margins are small and the very large investments. They also deprive 5 to 10 billion of additional margin to three years obtained through the transition from four to three operators. But Bouygues Telecom, Orange, SFR and Free are not the only losers. The state also. He did not will collect 1.3 billion euros in tax revenues on capital gains on disposals and rights of records related to the split sales of Bouygues Telecom.