Orange said talks with Bouygues Telecom about consolidation in the French mobile market are “ongoing and require at least several weeks before any decision is taken”.
Key negotiating points are the size of Bouygues’ stake in Orange following any deal and the destination of offloaded assets.
Weekend reports suggested that Orange could announce a preliminary agreement as soon as today at its full-year results. Instead, the company stated that negotiations, which have been running at least since the start of 2016, will continue for the moment.
Crucial discussions include the size of stake Bouygues would end up with in Orange following the proposed €10 billion cash and shares deal. The French government has a total stake of 23 per cent in Orange that would be diluted as Bouygues becomes the second largest shareholder behind it.
Political sensitivities need to be considered, said Reuters, as the government wishes to keep a blocking minority in the operator. Stephane Richard met President Francois Hollande to discuss the takeover.
More complexity comes from asset disposals that Orange must make to satisfy competition concerns. It plans to sell parts of Bouygues Telecom’s network, customer base and spectrum to rivals Free and SFR-Numericable. But, the Financial Times said, bringing the four-way talks to fruition is a time-consuming process.