BERLIN - Deutsche Telekom is examining a possible tie-up with French peer Orange, German business daily Handelsblatt reported on Wednesday, citing managers close to the matter.
A spokesman for Orange said “there are no ideas or discussions going on” regarding such an initiative.Orange and Deutsche Telekom have been talking on and off for years, although merger discussions in 2017 fizzled out because it was not feasible to put the companies on an equal footing, a source told ReutersHandelsblatt 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.
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. “We believe the likelihood of such a merger is very minor,” said analysts from Jefferies, citing hurdles that included likely political opposition, the German firm’s larger size and limited cross-border synergies.
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