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Orange-Bouygues deal faces delay as French state seeks to protect its position

Bouygues Telecom

Bouygues Telecom

Orange’s acquisition of Bouygues Telecom has run into a hurdle in the shape of the French state’s unwillingness to see its stake in the country’s leading telco fall below 20%, according to a report in the Journal du Dimanche.

According to the JDD, the finalisation of a deal between Orange and Bouygues is likely to be delayed while the parties hammer out an acceptable deal. Bouygues had been looking to take a stake of 15% in Orange following the sale of its telecom unit, but this would imply that the state’s stake in the operator would have to fall below the 20% threshold.

The state, which currently holds a 23% stake in Orange, is unwilling to reduce its holding to this extent. A 20% stake for the state would leave Bouygues with closer to 11%.

A deal would involve rival telcos Free and SFR taking over some of Bouygues Telecom’s assets as a regulatory condition. According to the JDD, the pair are ready to spend about €4.5 billion taking over some of the telco’s assets.