Orange SA Needs More Weeks For Bouygues Deal

Orange SA, will need more weeks to finalize the negotiation with Bouygues SA to acquire telecom unit of the French conglomerate. The French telecommunication company also reported its fourth quarter performance, which slightly below expectation, but generated a solid rise in the full-year earnings.

The former France Telecom said that the discussion for purchasing Bouygues telecom unit is still ongoing and will need more weeks to achieve decision. Bloomberg cited CEO Stephane Richard comment on Tuesday in an interview with BFM Radio, "This is a very big transaction -- we're talking about 10 billion euros, a difficult process and a deal that will change the industry structure. If we can find a solution in two months that's already a good performance."

Chief Financial Officer Ramon Fernandez also told Wall Street Journal in the same tone with the CEO, "Everyone agrees a market with four players has real risks for jobs and investments so there's a real willingness to find a solution." He also said about the decision to be made, "It's a complex operation as we need to find a solution between four parties, not just two."

In order to acquire telecom asset of the French conglomerate Bouygues, Orange must also sell its assets to French rivals in the telecommunication industry, Iliad SA and SFR. Sales of its significant asset is required to prevent mononopoly, thus to receive approval from antitrust authorities.

Bouygues is a French industrial group with four main business units: construction, real estate development, media and telecommunications. The conglomerate plan to sell its telecommunication business in order to focus its portfolio in construction, real estate and media. Boygues is the owner of TF1 television station and Colas construction group.

In the same time, Orange also reported its full year net income that achieved €2.65 billion ($3 billion) as reported by Market Watch. While sales in the full year was reported to reach € 40.24 billion ($45 billion), slightly missed the expectation of €40.26 billion ($45.02 billion).

The company also reported sales in the fourth quarter rose to €10.4 billion ($11.6 billion), but sales in its home country France were down 0.8% from last year's result. This has been the second consecutive quarter of rising sales and earnings after years of struggling in a tough competition hurt its financial performance.

In the next step to takeover Bouygues SA, Orange SA will need to discuss further and selling its significant asset to other competitors. This is required in order to receive approval from antitrust authorities. The decision is expected to be reached within several weeks ahead.

Real Time Analytics