Orange-Bouygues Talks Said Slowed by Asset Sales to Rivals

  • Iliad, Numericable-SFR in discussions to buy some operations
  • Deal would reduce French telecom carriers to three from four

Orange SA’s talks to buy the phone business of Bouygues SA are hung up on terms for the sale of network and spectrum assets to rivals, potentially delaying any agreement beyond the end of March, people familiar with the negotiations said.

Orange has been negotiating with competitors Iliad SA and Numericable-SFR SAS over the sale of assets to fend off antitrust concerns. Those talks have led to disagreements over who will buy Bouygues’ mobile frequencies and network, and how many stores and personnel the prospective acquirers are willing to take on, the people said, asking not to be named discussing private talks.

While the talks have a good chance of leading to an agreement, four-way discussions to consolidate French telecommunications to three players are proving complicated and the calendar is likely to slip to the end of March at best, the people said. Iliad’s appetite for wireless frequencies and parts of Bouygues Telecom’s network is the biggest blockage point at this stage of the negotiations, two of the people said.

Orange Chief Executive Officer Stephane Richard has been at the center of talks, going back and forth between rivals to reach a deal that values Bouygues Telecom at about 10 billion euros ($11.2 billion) in total. The French government, which is Orange’s biggest shareholder, is also involved.

Orange has said it’s aiming for a decision by the end of the month. Bouygues said Feb. 24 the talks need to be completed by the end of March to limit disruption to clients, employees and the market itself.

Bouygues also turned up the pressure last month by demanding an initial stake of at least 10 percent in Orange and saying there’s a 50 percent chance the deal won’t happen. Meanwhile Iliad Chief Financial Officer Thomas Reynaud told reporters this week that his company would be interested in parts of Bouygues’ mobile network and frequencies, and would fund purchases with debt.

Representatives of Orange, Bouygues, Iliad and Numericable-SFR declined to comment.

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