Going, going... still here: Bouygues/Orange negotiation deadline moved to Sunday
via Flickr © lgrassin (CC BY 2.0)
The negotiations under way to reduce France’s four operators to three have stumbled. The boards of both Orange and Bouygues met separately yesterday and decided that not enough negotiating progress had been made to declare that a deal had been struck in advance of today’s agreed deadline. That deadline has therefore been put off until Sunday in the hope that a further thrashing will yield a result.
If it does it may bring to an end several years of M&A turmoil in the French mobile market which has seen mobile networks shuffled from one player to another but thus far no mobile network ‘consolidation’. Despite all the talk of consolidating to invest, what the operators and their shareholders really want is a reduction in players so they can put their prices up. For that reason other moves - particularly Numericable's purchase of mobile operator SFR - have failed to hit the spot since it left four price-competing operators in place (see - Numericable to open its network as price of buying SFR)
So the latest move - the merger of Bouygues and Orange - is being cheered along by the ‘markets’ (and probably also the other players) on the basis that mobile prices will rise. French users may be less pleased
According to Reuters, the negotiations have stalled because “key issues remained unresolved” which means key items such as a Bouygues mobile network valuation, the size of its stake in Orange (as the price of the merger), and post merger Orange board representation are all still possible issues. It’s thought that the deal would see Bouygues end up as the second largest shareholder in Orange after the French state.
It’s understood that Bouygues billionaire founder, Martin Bouygues, has valued the business at €10 billion .