No deal between Orange and Bouygues Telecom as merger talks collapse

Orange will not acquire Bouygues Telecom after all. This is the latest update on the story which we have been following this morning after Orange announced via a statement published on March 30 that the two firms are holding talks aimed at a possible consolidation of their operations.

However, according to the latest statement issued by Orange on April 1, the acquisition will not go through.

“After in-depth discussions, the Board of Directors of Orange has concluded that an agreement regarding a possible consolidation with Bouygues Telecom has not been reached.

The decision has therefore been taken to end the discussions with Bouygues that have been ongoing since 5 January 2016,” Orange stated.

The statement, titled ‘End of discussions between Orange and Bouygues’ further adds: “Continuing its strong dynamic, Orange will pursue the deployment of its strategic plan, launched in 2015, that is focused on investment in very high-speed broadband networks and providing an unmatched customer experience. The Group confirms all of its financial objectives.”

This morning, we reported that the Orange board would again on Sunday April 3, 2016 to examine the result of these discussions.

Why the Orange board has decided to terminate the talks before the Sunday deadline is unclear but this could have everything to do with various issues and technicalities around the merger / consolidation.

On Thursday, Reuters reported that “the value of Bouygues Telecom, the eventual size of the stake of Bouygues in Orange and the scale of Bouygues’ representation on the enlarged board of Orange remained unresolved” in an article quoting sources.

“The 10-billion-euro price tag set by billionaire Martin Bouygues for Bouygues Telecom…is considered too high by several parties involved and there are talks about a standstill provision to cap Bouygues’ stake in Orange, another source said,” stated the Reuters article, adding that Orange’s top management had started to “question Bouygues’ will to sell its telecom division.”

Founded in 1194, Bouygues Telecom is a French mobile phone, Internet service provider and IPTV company, part of the Bouygues group. The firm was founded by Martin Bouygues.

In terms of marketshare, Bouygues Telecom currently has 14.7 million customers including 2.8 million fixed broadband customers. It also has a directly-owned fixed network that is already accessible to 16.1 million households in broadband and to 1.5 million households in the FTTH segment.

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