TheChek News Flow

Prohibited marriage, the incumbent? This is not the opinion of everyone. Reportedly, Orange talks with Bouygues Bouygues Telecom to buy. The CEO of the incumbent Stéphane Richard and Martin Bouygues spoke live on several occasions. The government has been kept. "Our options were evaluated, but no one asked me on the side of the state to study the acquisition of Bouygues Telecom," says Stéphane Richard, however, contacted by "Les Echos". The initiative comes in effect Martin Bouygues.

A superb top out Martin Bouygues

The main beneficiary of this operation would be Martin Bouygues, who laments not being able to buy SFR, and looking for a solution for its subsidiary in decline. The natural buyer, Free, does not offer him a good price for its telecoms 4 or 5 billion while Martin Bouygues wants 8000000000. In the transaction in question, the value of Bouygues Telecom would amount to at least € 6 billion.

Especially, the Bouygues Group and its partner JCDecaux (which owns 10% of Bouygues Telecom) benefit from the sale of the asset to be paid in shares, and therefore up to the Orange capital. By donating a portion in cash, they could be around 10% of the capital. They thus become the largest shareholder behind the state of an international group, the first among global operators, too big to fail and not a potential takeover target. A superb top out to the shareholders of the small operator today in a cul-de-sac, because they have invested in a fixed network and have sufficient mobile clients.

The specter of social destruction

The state, which owns 27% of Orange, has several concerns. First, turn off the fire which seems to cover social in telecoms, due to intense price competition. Bouygues Telecom stirred two scarecrows: a plan for job cuts that could affect 2,000 people over a little less than 9,000; and a price war in the fixed which may result also by downsizing among all operators.

If swallowed Orange Bouygues Telecom, the plan 2,000 job cuts would not take place to be, says Sébastien Crozier, the CFE-CGC Orange "2,000 jobs, it's four months of natural attrition us. With these jobs would only delay 4 months plan Orange starts ... and we would be happy to see the arrival of these employees rajeuniraient our pyramid. "

A favorable union merger of Orange

The union has also today published an open letter to Prime Minister Manuel Valls called for the two operators merge letter. CFE-CGC maintains close relations with the leadership of the Bouygues group - a source of inspiration in the employee share (one quarter of Bouygues employees are shareholders in their company). Olivier Roussat, the CEO of Bouygues, invited to the Summer School of the union, was warmly applauded by the Orange activists!

According to the CFE-CGC, such a merger would be beneficial to Orange as "having the support of a construction group to deploy its fiber network would enable Orange to accelerate and complete its commitments faster coverage territory very broadband. "Internationally, well, construction and telecoms could go hand in hand." If Bouygues becomes shareholder of the incumbent, he will also finally possible, together with the forces of ownership employee, find a business strategy focused on the development of the activity, rather than the payment of a dividend abuse, "argues the CFE-CGC.

Arnaud Montebourg pushes the Alstom-Siemens deal

The Minister of Economy Arnaud Montebourg is very involved in the case. He has an obsession: to return to a balance of three telecom operators to better end the price war. He said that the State would be in the consolidation of motor Bouygues with "another operator," and said about it: "That's good, we are shareholders of an operator and not the least, so we are very interested in successful completion of this great national project. "A buyout rather than Orange Free would avoid massive social destruction.

Moreover, Arnaud Montebourg think there have a lever to take revenge on the Alstom case. The Minister had been hit as the CEO of the conglomerate Patrick Kron, and its largest shareholder Martin Bouygues him hide the ongoing negotiations to sell Alstom General Electric. Arnaud Montebourg is in favor of a takeover by Siemens, and could use the current negotiations between Orange and Bouygues to get an Alstom-Siemens deal.

Melting at high competitive risk

Remains to what extent a marriage-Bouygues Telecom Orange is feasible. Most market participants do not believe it. The new entity would weigh half of the French mobile market (volume of SIM cards), and 44-45% of the fixed market. Orange is already the only incumbent to Western Europe with Telefonica to have remained the market leader, and it would further strengthen? It is unlikely that the authorities in Brussels, which will have jurisdiction over the operation, let pass such a marriage without seeking huge concessions in exchange (the "remedies").

According to our information, Bouygues plans to sell the mobile network Bouygues Telecom and frequencies to 1.8 billion euros Free Mobile - exactly what was provided in the context of a merger-SFR Bouygues. This would strengthen the fourth operator. Negotiators are also convinced that it will sell 2 million fixed Bouygues Telecom customers or mobile clients. Even making these efforts, the competitive risk remains high. Stéphane Richard, caution should be: "I do not want to Orange in an adventure," he explains the "Echos".

In parallel, Orange continues to explore another option, much more "reasonable" within the competitive level: infrastructure sharing mobile network with Bouygues, if possible by pooling the frequencies and reselling some of antennas Free Mobile, while praising Orange fiber network Bouygues Telecom. Bouygues One way to cut ties with SFR-Numericable (mobile sharing, rental of fiber), and Orange to share with someone other than Free.