Deutsche Telekom still weighing merger with Orange: report
28 November 2019
Deutsche Telekom is reported to be weighing a possible tie-up with French peer Orange, German business daily Handelsblatt reported on Wednesday, citing managers close to the matter.
Spokespersons for Orange and Deutsche Telekom, however, declined to comment.
The two European telecom majors have been in talks for the past several years and merger discussions in 2017 had fizzled out as the two found it was not feasible to put both companies on an equal footing.
The Handelsblatt report said Deutsche Telekom was assessing the potential of a tie-up with Orange, adding that the two companies had cooperated on purchases in the past eight years.
Deutsche Telekom is Europe’s biggest telecommunications company with a market capitalisation of about 72 billion euros ($79 billion), according to Refinitiv data. Paris-listed Orange is worth about 40 billion euros.
Orange is one of the world’s leading telecommunications operators with sales of 41 billion euros in 2018 and 148,000 employees worldwide as of 30 September 2019, including 88,000 employees in France.
The Group has a total customer base of 268 million customers worldwide at 30 September 2019, including 209 million mobile customers and 21million fixed broadband customers.
The Group is present in 27 countries. Orange is also a leading provider of global IT and telecommunication services to multinational companies, under the brand Orange Business Services.
The German and French governments own sizeable stakes in the respective companies, making any deal politically charged. The size of Deutsche Telekom means a deal would likely mean a takeover of Orange, potentially hard for Paris to swallow.
The telecoms industry in Europe is facing competition from internet firms, such as Amazon. There is also the European Commission, which is not disposed to approving major mergers and acquisitions because it reckons the consumer always ends up getting ripped off as a result.