Deutsche Tel scale scuppered Orange merger talks - Mobile World Live

Deutsche Tel scale scuppered Orange merger talks

23 JAN 2018

Deutsche Telekom (DT) and Orange held discussions about a possible merger in 2017, but talks eventually fizzled out after the two companies were unable to come to an agreement.

French publication Le Monde reported the companies held talks between May and September, but the matter did not progress as far as mandating a bank to work on a possible deal.

Discussions have reportedly now ended.

A major sticking point was the fact Germany-headquartered Deutsche Telekom is far bigger than France-based Orange, which meant it was not feasible to strike a deal which would have put both companies on an equal footing.

Reuters placed Deutsche Telekom’s market value at around €70 billion and Orange €40 billion.

The French and German governments hold sizeable stakes in Orange and Deutsche Telekom respectively, which could have led to political complications had the two companies pressed ahead. The telecoms giants also have overlapping businesses in Poland, Slovakia and Romania, which could have resulted in heightened regulatory concerns and reduce the business logic behind such a deal.

“It was studied by internal teams. But people quickly came to the conclusion that nothing could be done as Deutsche Telekom is far bigger than Orange,” a source told Reuters.

A banking source, however, noted another round of talks this year could not be ruled out, amid a renewed push to deepen European cooperation from France and Germany

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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