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Orange-Bouygues Telecom merger talks fall through

The boards of Bouygues Group and Orange decided to end negotiations for a possible between and Orange afterfailure to find agreement on certain points.

In an April 1 news release, Bouygues said the twoparties failed to agree on the following points: the interests of BouyguesTelecom's employees and the social guarantees provided to them by such anoperation; the level of Bouygues' equity stake in Orange, and the relatedgovernance, that would enable it to become a significant shareholder capable ofsupporting Orange's growth over the long term; the execution risk; and BouyguesTelecom's valuation.

In a market "where the possibility ofconsolidation is now ruled out for the long term," Bouygues Telecom willcontinue its stand-alone strategy, according to the news release. Bouyguesconfirmed an EBITDA margin target of 25% for 2017 and 35% longer term forBouygues Telecom.

In a separate news release, Orange said it willpursue the deployment of its strategic plan, which was launched in 2015. Thegroup confirmed all of its financial objectives.