PARIS, (APP/AFP) – Stocks in French telecoms companies fell sharply on Monday after market leader Orange said talks to purchase the rival network owned by industrial group Bouygues had failed.
The company said that “after in-depth discussions, the Board of Directors of Orange has concluded that an agreement regarding a possible consolidation with Bouygues Telecom has not been reached.
“The decision has therefore been taken to end the discussions with Bouygues that have been ongoing since” January, Orange said in a statement Friday.
Shares in Orange fell 5.2 percent in early Paris stock exchange business Monday, Bouygues fell 15.8 percent, Iliad, parent company of the Free operator, dropped 13.5 percent and Numericable-SFR 12.2 percent.
Sources said that the valuation of the two companies was one of the main sticking points in the talks and would have resulted in the number of mobile operators in France dropping to three — a number that many analysts believe is all the French market can bear, instead of the current four.
Another was the risks that the deal would be blocked by competition
authorities over concerns it could lead to higher prices for consumers.
Bouygues chairman Martin Bouygues told daily Le Figaro’s online edition that three of France’s big players had wanted the merger to succeed but the fourth, whom he did not name, had put a spanner in the works.
“There were four of us around the negotiating table, but only three of us wanted to make it work,” he said in remarks published Monday.
“Clearly one the players had the ambition to get the most while paying the least, with the option of pulling out,” he said.
Asked whether he meant Free chairman Xavier Niel, Bouygues said: “Everyone is entitled to their own interpretation.”
The two companies announced publicly in January they were holding talks, the second time they have considered a tie-up, and the fifth attempt in two years to consolidate the market where operators have been slashing prices to capture customers.