France’s Orange apparently signed a confidentiality agreement with smaller rival Bouygues, with a view of securing a take-over of its telecoms arm in a deal worth €10 billion.
French newspaper Journal du Dimanche reports the companies signed the agreement on 24 December to mark the start of official negotiations. Bloomberg first reported that Orange was eyeing a deal for Bouygues Telecom at the beginning of last month.
As part of the reported terms of the deal, Bouygues would receive a 15 per cent stake in Orange, valued at approximately €8 billion, with the remaining €2 billion paid in cash, according to the publication.
In turn, France’s 23 per cent stake in Orange could also be diluted to under 20 per cent should state investment company BPI sell part of its holding. Bouygues would however still retain a lower stake than the state, said a source.
As part of the talks, Orange could also take a 10 per cent stake in France’s largest commercial television channel TF1, which is owned by Bouygues, according to a separate report from Le Canard Enchainenewspaper.
Full content: The Financial Times
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