Orange CEO Turns to Deals Away From Home After Bouygues Failure

  • Phone company to expand in Europe, grow in Africa, CEO says
  • Shift away from price war is still key in France, Richard says

Inside the Collapse of the Orange, Bouygues Deal

Orange SA will turn its attention to potential deals to expand in Europe as well as the Middle East and Africa after its attempt to consolidate the French market faltered, Chief Executive Officer Stephane Richard said.

Failure to reach an accord to buy Bouygues SA’s phone business doesn’t call Orange’s strategy in France into question, Richard said in an interview on Monday. To counter discount offerings from rivals, the country’s former phone monopoly and largest carrier will compete on service, network quality and innovation, in a bid to shift consumers’ focus away from low prices, he said.

“Consolidation would have made things easier, but our strategy in France hasn’t changed,” Richard said. “We’ll also continue to seek opportunities to consolidate and enter new markets in Europe, as well as expand in Africa and the Middle East.”

Talks to take over Bouygues Telecom in a 10 billion-euro ($11.4 billion) deal ended on April 1 after months of back and forth. Richard said Orange is keen to move past the failure, which drove French telecommunications shares down on Monday. Assets like Royal KPN NV, TDC A/S and Telecom Italia SpA have been cited as the next pieces of the European consolidation puzzle.

Orange’s latest acquisition is a 75 million-euro stake in Africa Internet Group, Richard said. The company owns online businesses including in e-commerce and has German startup backer Rocket Internet SE among its investors. He declined to comment about any potential targets.

Shares of Orange fell 6.2 percent to 14.44 euros at 4:45 p.m. in Paris. Bouygues, Iliad SA and Numericable-SFR SA shares each sank more than 13 percent.

“We have a clear strategy through 2020 and French consolidation was never a prerequisite for it,” Richard said. “I’ve always said we have the least to lose if consolidation doesn’t happen -- the stock reactions today show that investors share that view.”

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