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Orange in Takeover Talks with Bouygues Telecom

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France based Orange is reportedly in talks to buy its smaller local rival, Bouygues Telecom in a deal which could see the local market consolidate down to three mobile networks.

According to local media reports, the deal would value Bouygues Telecom at around EUR10 billion (USD10.9 billion), and it is likely to be a shares and cash deal.

If a deal were agreed, then the current understanding is that Bouygues would receive a 15 percent stake in Orange valued at EUR8 billion and the remainder in cash, Le Journal du Dimanche wrote, citing unnamed sources.

"The teams get along well, the talks are advancing, we'll know quickly whether we can go all the way," one source was quoted as saying.

Neither company has commented on the report.

A merger of the two networks would pose a regulatory headache, as the company would end up with more than 50 percent of the market. It is highly likely that some of the network and customer base would have to be spun off, probably to the smallest network, Free Mobile to assuage competition concerns.

Last year, Martin Bouygues, the group's CEO reportedly rebuffed an offer from rival French telco, Numericable-SFR after holding out for at least EUR 11 billion.

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Tags: orange  bouygues telecom  France