Orange SA and Bouygues SA are heading into a make-or-break weekend as they try to salvage their wireless-phone merger plan, after acknowledging that talks had not advanced enough to clinch a deal.
Shares of both companies declined after they agreed to extend discussions, with months of talks failing to produce an agreement on a deal that would create a French wireless giant.
The boards are to meet again by Sunday after a final negotiating push, they said in separate statements yesterday.
Orange’s planned purchase of Bouygues’ wireless carrier would value the unit at as much as 10 billion euros (US$11 billion).
The companies and the French government have yet to agree on how many Orange shares and votes Bouygues would receive in the transaction, people familiar with the matter said.
The sides are also still debating how potential breakup fees would be shared, with board members raising questions about the risk that a deal might be knocked down by competition authorities, the people said.
Bouygues said that its board “will meet before the end of the weekend in order to make a final decision whether to pursue the merger plan or not.”
A union would eliminate one combatant in one of Europe’s most competitive wireless markets, cutting the number of major players to three and potentially making competition less fierce. That would allow Orange to save on costs such as equipment purchases and customer service.
The talks involve numerous parties as Orange tries to offload some Bouygues assets to allay any antitrust concerns. To head off any antitrust challenges, Orange has been negotiating to sell part of Bouygues Telecom’s assets to Numericable-SFR and Iliad, the No. 2 and No. 3 operators in the French market by clients.
A smaller operator, Coriolis Telecom SAS, might bid for some Bouygues Telecom assets, Le Parisien reported this week.
Last year, Bouygues rejected a 10 billion euro offer from Numericable, which is controlled by billionaire Patrick Drahi’s Altice NV.
The French government holds about 23 percent of Orange, the former state phone monopoly, including a direct stake of about 13 percent and about 10 percent owned through public investment bank Bpifrance.
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