Orange and Bouygues Telecom confirmed in early January that they were holding talks about a potential consolidation that would reduce the number of mobile operators in France from four to three. Orange CEO Stephane Richard said in early February that a decision on the potential acquisition would be made by the end of the month or by the middle of March. Bouygues group CEO Martin Bouygues told Les Echos newspaper towards the end of February that the talks would not go past the first quarter.
Many factors are involved in the operation, including price, how large an Orange stake Bouygues would acquire, how much of its 23 percent Orange stake the French state is ready to give up, and which Bouygues assets would have to be sold to other operators to obtain the authorisation of the French competition authority. According to a report in Le Monde, Bouygues estimates the value of its telecom operations at EUR 10 billion and would like a 15 percent stake in Orange in exchange. However, the French state would like to limit Bouygues to 9 percent and have the company agree to a standstill as part of a shareholders pact, the paper's sources said. In addition, the government wants Bouygues to pay the "social cost" of several hundreds of millions of euros to integrate the two companies' workforces.
