France: Massive €10 billion telecoms merger collapses

Orange SA abandoned its attempt to buy the phone business of Bouygues SA, denying the French phone industry a much-sought consolidation that would have eased competition in one of Europe’s toughest markets.

“After in-depth discussions, the board of directors of Orange has concluded that an agreement regarding a possible consolidation with Bouygues Telecom has not been reached,” Orange said Friday in a statement.

The sides had imposed a deadline by the end of the weekend, but the talks broke down well before then. Bouygues, in a separate statement, said key sticking points included social guarantees for its employees, the level of its stake in Orange and related governance, execution risk and the valuation of its telecom unit.

Negotiators toiled for months to craft an agreement involving at least four companies and the French government. In the end, the obstacles were too much to overcome. An accord would have cut the number of major French wireless carriers to three, giving Orange breathing room to save on costs such as equipment purchases and customer service.

Full content: Gulf News

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