PARIS (Reuters) - French telecommunications operator Orange ORAN.PA has started informal talks with rivals Numericable-SFR NUME.PA and Iliad ILD.PA on possible asset sales to satisfy competition concerns in case it acquires Bouygues Telecom, sources close to the matter said.
The talks include the potential sale of part of Bouygues Telecom’s mobile spectrum, its customer base, network and shops, the sources said.
Orange, France’s biggest telecoms firm, is in talks to buy Bouygues Telecom for about 10 billion euros ($10.9 bln) in cash and shares. Bouygues, France’s third-largest mobile operator, could receive a 15 percent stake in Orange valued at 8 billion euros and the rest in cash.
A decision on a potential deal between Orange and Bouygues may be reached before the publication of Orange’s full-year earnings on Feb. 16, the sources said.
“All the players want to make it happen,” one of the sources said. “It is probably the last opportunity to succeed in the consolidation of the market.”
The French government, Orange’s leading shareholder with 23 percent, wants Bouygues’ stake in the former national operator to be capped at 10 percent, the sources said, adding the government wanted to keep three seats on the new board of directors if the merger succeeded.
A French economy ministry spokeswoman said the government would remain Orange’s reference shareholder with a blocking minority, whatever the outcome of the talks.
The spokeswoman declined to comment on the possible size of Bouygues’ stake in Orange and its future corporate governance.
Spokespeople for Iliad, Numericable-SFR and Orange declined to comment.
Orange, which would control more than 50 percent of France’s mobile phone market by acquiring all of Bouygues Telecom, needs to agree on the sale of some of the parts of its target if it wants to win the regulatory approval of the transaction.
Orange Chief Executive Stephane Richard said earlier this week that he expected the deal to be screened by France’s competition authorities rather than the European Commission.
Under current European Union regulation, the European Commission would get involved if the telecoms firm generated less than two-thirds of its EU turnover in France. With Friday's approval by the British Competition and Markets Authority (CMA) of the sale of Orange's stake in UK-based EE to BT BT.L, Orange may see that calculation change in favor of the French competition authority, Citi said in a note to clients.
Reporting by Mathieu Rosemain, Gwenaelle Barzic, Matthieu Protard, Jean-Baptiste Vey and Arno Schuetze; editing by Geert De Clercq
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