Acquisition of Bouygues Telecom by Orange? It’s no thank you for Bouygues

by bold-lichterman

Since the takeover of SFR by Numericable, information about the takeover of Bouygues Télécom (which was in contention at the time for the acquisition of the Vivendi subsidiary) has been going well. According to Bloomberg, Orange has entered into “preliminary” discussions with the Bouygues group with a view to acquiring several assets in its telecoms and media activities. In the event of this potential merger, the Bouygues group would then hold a minority stake in the new entity. The American agency specifies, however, that no formal offer or decision has been made.

Already several offers

However, the group of Martin Bouygues announced this morning in a terse press release: “Bouygues indicates that it has no plans to exit from the telecoms and television sectors and reaffirms its lasting foothold in these two industries”.

This is not the first time that a possible acquisition of Bouygues Telecom by another operator – which would result in reducing the market to three operators – has surfaced. The subsidiary of the Bouygues group has been weakened since it failed last year to get its hands on SFR, in favor of Altice-Numericable.

This summer, Patrick Drahi, the boss of Altice (the parent company of Numericable) had already formulated a takeover offer of 10 billion euros on the subsidiary of the Bouygues group. The latter’s board of directors had then unanimously notified him of an end of inadmissibility. “He considers that Bouygues Telecom is particularly well placed to benefit from this growth knowing that it has a strong and lasting competitive advantage thanks to its portfolio of frequencies and its 4G network recognized as one of the best on the market”, he said at the time.

An encouraging third quarter

Orange had also studied a possible acquisition of Bouygues Telecom, before throwing in the towel. “Orange has explored the possibilities of participating in an operation to consolidate the French telecommunications market, and considers that the conditions that the group had set are not met today to follow through,” he said in a statement.

Despite its difficulties, Bouygues Telecom nevertheless managed to reduce its losses during the third quarter thanks to the acquisition of new subscribers. The turnover grew 4% to € 1.16 billion over the three months, and EBITDA was up € 21 million to € 242 million. In the end, the operator recorded a profit of 16 million euros from July to September.