• Richard says `in-depth' review of possible deal is under way
  • Regulatory hurdles, complexity of structure seen as hurdles

Orange SA will walk away from a deal to buy Bouygues SA’s mobile-phone unit if it’s too risky to execute, Chief Executive Offer Stephane Richard said.

Richard said he’s evaluating a potential Bouygues accord based on whether it creates value for Orange, puts jobs in jeopardy, and how risky it is to pull off. He cited regulatory hurdles and the complexity of structuring a deal as potential obstacles.

Stephane Richard
Stephane Richard
Photographer: Christophe Morin/Bloomberg

"We’ve started an in-depth study of a transaction, but I won’t take Orange into a deal that doesn’t fit our essential criteria," Richard said Tuesday at the company’s headquarters in Paris during a conference. "It’s a complex operation."

The acquisition of Bouygues Telecom would help boost profitability in the industry by reducing the number of wireless operators to three from four. Mobile companies have suffered since Iliad SA began offering services in 2012 under the Free brand name at prices that undercut existing operators.

Bouygues and Orange, France’s biggest phone company, said last week they were in talks, though there was no guarantee they would result in a deal. The companies are evaluating selling some assets to Iliad and Numericable-SFR SAS to help pass regulatory hurdles for the deal, people familiar with the matter said at the time, asking not to be named discussing private deliberations.

Orange rose 3.5 percent to 15.72 euros at 10:20 a.m. in Paris. Bouygues, a Paris-based construction and public-works company, climbed 0.7 percent to 35.71 euros.

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