Orange SA and Israel’s Partner Communications Co. agreed on a framework over the use of the French mobile carrier’s brand as the companies seek to move on from an impasse that triggered a diplomatic storm this month.
Partner, which licenses the Orange brand in Israel, will receive 40 million euros ($45 million) from the Paris-based company as they agreed to conduct a market study to assess their relationship going forward, according to a statement Tuesday. The partnership began to fray when Orange Chief Executive Officer Stephane Richard said he would leave Israel if he could, only to apologize later for his comments.
“After all the brouhaha between the two companies, it seems like they are now moving into firmer footing,” said Gil Dattner, a Tel Aviv-based analyst at Bank Leumi’s capital markets division. “They’ve agreed to sit down and talk about what they want to do in terms of the brand, whether they want to continue together, or end the partnership. The tendency is for Partner to end up staying with Orange.”
Richard said June 3 in Cairo that Orange would sever relations with Israel’s Partner the next day if he wasn’t concerned about potential legal penalties. Partner had renewed its contract in March to use the Orange brand for 10 more years. Israeli Prime Minister Benjamin Netanyahu called Richard’s comments “despicable.” A week later, Richard visited Netanyahu to explain that his comments were misunderstood, and that Orange doesn’t take part in boycotts of Israel.
Under the new framework, should Partner not terminate the agreement within 12 months, either side may cancel the accord in the following 12-month period. Partner would receive an additional 50 million euros if the deal is ended within 24 months.
Partner rose 2.3 percent to 10.73 shekels at 10:31 a.m. in Tel Aviv. Orange slipped 0.8 percent to 13.95 euros in Paris.