French telecom group Orange has hired Credit Suisse and Lazard banks to assess the potential acquisition of competitor Bouygues Telecom, a deal that could be worth more than EUR 6 billion, two people close to the matter told Reuters. Talks began around six weeks ago and Orange has not decided whether to bid for Bouygues.
Preliminary discussions with European anti-trust regulators encouraged Orange that a purchase would be allowed with conditions. But Orange is waiting to see how the EC will rule on Telefonica’s acquistion of German operator E-Plus from KPN, with a ruling expected by 10 July. Bouygues, which could also be of interest to Free owner Iliad, is reportedly prepared to make an offer for full MVNO Virgin Mobile France.
The French government, which owns 27 percent of Orange, seeks a return to three MNOs to enable operators to invest in fibre. A combined Orange-Bouygues would have a 49 percent share of mobile subscribers and a 48 percent share of brodband customers. Remedies would include disposing of some customers, selling mobile frequencies and most of the Bouygues network to Iliad.
