23 January 2018
| James Pearce
Reports claim Deutsche Telekom held talks about a mega merger with Orange last year, but the discussions fizzled out with the companies failing to agree on terms.
Le Monde claims the German and French
telcos, each the biggest player in their respective domestic
markets, held talks about a tie-up between May and September
2017, but have now ended.
Both companies, which hold large wholesale
units in the form of ICSS and Orange International Carrier
Services, would have some overlapping units, most notably in
Poland, Slovakia and Romania.
Deutsche Telekom is valued at around
€70 billion, according to Reuters, almost double the
€40 billion valuation of its French counterpart, and this
disparity in size was a key factor in the breakdown of talks,
the report claims.
Each former incumbent is also partly-owned
by its respective government, with Germany holding around 14.5%
in direct stock and another 17.4% through the government bank
KfW. The French government owns an estimated 15% stake in
According to a Reuters source, the talks
have now definitively ended. The source said: ""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. The matter is now closed."
Both telecoms operators have a history of
working together. In 2010 they teamed up to for a joint venture
in the UK by combining their respective UK mobile operations,
T-Mobile and Orange, to form EE. This was later sold to BT,
with both operators holding an interest in the UK telco.
mergers and acquisitions,
Orange International Carrier Services