Iliad talks to acquire Bouygues Telecom at a standstill

10 June 2014 | Kavit Majithia


French operator Iliad has reportedly made a bid of up to €5 billion to acquire Bouygues Telecom, but failed to meet the company's asking price.

Bouygues is internally valued at approximately €8 billion and the discussions have now been left at a standstill.

French regulators have supported the idea of France becoming a three-player market, and there have been rumours in recent weeks that Orange is also interested in a potential tie-up with Bouygues.

Much of the drive towards consolidation in Europe is coming from companies looking to combine operations to counter the costs of providing high-speed 4G networks.

Bloomberg reports that both Iliad and Bouygues have refused to comment on the situation.

Bouygues is seeking a sale of its operations and has also reportedly put on hold plans to share its mobile network with France's second-largest player SFR, with SFR likely to seek compensation if Bouygues pulls out of the agreement as a result of any deal.

Network-sharing agreements are becoming commonplace in Europe to save money on infrastructure, with France at the forefront of this framework.

Following a price war in the country as a result of the entrance of Iliad's low-cost mobile operator Free Mobile, there have been reduced profits and revenues for the country's largest players.