Orange hires banks to advise on Bouygues deal

05 June 2014 | Sophie Donoghue


French operator Orange has called on the Credit Suisse and Lazard banks to help advise on a potential acquisition of rival Bouygues Telecom.

A combined Orange and Bouygues would create a company consisting of 50% of France's wireless users. Due to regulatory concerns Orange is still undecided about the deal, which could be worth more than €6 billion.

Early negotiations with European anti-trust regulators have indicated that the acquisition would be allowed after certain conditions had been met.

Concessions would include disposing of some customers and selling mobile frequencies and a large amount of the Bouygues network to competing operator Iliad.

Orange is reportedly waiting to see the outcome of the EU ruling on Telefonica’s acquisition of German operator E-Plus from KPN, which is expected to be released by 10 July.

Orange and Bouygues have reportedly been looking at options to merge after calls from the country’s government for further consolidation in the market in May.

Since low-cost operator Iliad began a price war by offering lower tariffs, the French market – which consists of four players – is considered to be one of the most competitive in Europe.

In an effort to counter distressed earnings and job losses across the industry, the French government is likely to encourage a reduction in the number of domestic operators to three players.