Merger talks between state-controlled telecoms group Orange (ORAN.PA) and Bouygues Telecom (BOUY.PA) to create France’s biggest telecoms operator have failed, a source close to Bouygues said on Friday, confirming a report by Le Figaro.

The French daily said the French government’s demands led Martin Bouygues, who leads construction and media group Bouygues, to throw in the towel.

“The deal is dead,” the source told Reuters.

No-one at Orange, Bouygues or the French economy ministry was immediately available for comment.

The 10 billion euro cash-and-share deal was hung up on a stand-off between billionaire Martin Bouygues and French Economy Minister Emmanuel Macron about the clout the businessman would have gained in the former state monopoly, sources had told Reuters earlier.

The tie-up would have made Bouygues the second-biggest shareholder of Orange after the French state, whose 23 percent stake would be diluted.

The French Economy Ministry had asked Bouygues to accept capping its potential stake in Orange for seven years, under a so-called standstill clause, and accept giving up for 10 years the double-voting rights Bouygues would get as a long-term investor in Orange, another source said.

The deal would have cut the number of telecoms operators in France to three from the current four and helped ease a savage price war that has hit margins in the sector since low-cost rival Iliad (ILD.PA) entered the market.

(Reporting by Mathieu Rosemain; writing by Michel Rose, editing by David Evans)

Let’s block ads! (Why?)

Related Posts

Facebook Comments

Return to Top ▲Return to Top ▲