Orange and Vodafone discussed but dropped merger idea last year, says BFM TV

PARIS, 6 Dec. (Reuters) – Orange (ORAN.PA), France’s largest telecom operator, and Britain’s Vodafone (VOD.L) discussed a merger of equals between mid-2020 and early 2021 but then dropped out the project due to French opposition, BFM TV reported, citing sources.

The French state, which owns 23% of Orange, was concerned that it would lose some control and see the new company’s headquarters move to London, BFM said, adding that the two companies could still discuss an alliance at smaller scale.

Orange and Vodafone both declined to comment on the report. France’s finance ministry did not immediately respond to requests for comment.

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A merger between Orange and Vodafone would have created Europe’s largest telecommunications operator with € 85 billion ($ 96 billion) in revenue, BFM said.

Martin Vial, director of the French public shareholding agency APE, said this year that France could change its stake in telecommunications company Orange in the medium term.

Both companies have extensive operations in Europe in Africa, with competing operations in Spain, Romania, Egypt and the Democratic Republic of the Congo.

Jefferies analysts noted that in relation to the cited objections from French states, Stéphane Richard’s departure from Orange was now confirmed and the Netherlands had been suggested as the seat of compromise. Read more

“Still, we believe Spanish towers (mobile infrastructure) and service companies would be less politically charged scenarios,” they said.

Orange CFO Ramon Fernandez told the Morgan Stanley TMT conference last month that France would “inevitably” see the number of telecoms operators drop from four to three, adding that recent buyout deals by two of them, Iliad and Altice, could improve conditions. for a merger. Read more

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Reporting by Gwenaelle Barzic and Paul Sandle, written by Benoit Van Overstraeten; Editing by Edmund Blair and Louise Heavens

Our Standards: Thomson Reuters Trust Principles.

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