Orange SA monitors Spain in search for acquisition targets

According to people with knowledge of the matter, Orange SA has boosted its search for acquisition targets in Spain in order to prevent it from being excluded from a potential consolidation in the telecommunications market of the country.

Orange SA is currently the largest carrier in France. The people familiar with these matters, who asked not to be named, because the discussions are not yet public, revealed that the company is negotiating with some investment banks over possible acquisitions, which include Jazztel Plc and the Yoigo unit of TeliaSonera AB. They explained that a final decision has not been made by the company. Orange may abandon the idea of a certain purchases price is too high.

The people, who provided the information revealed that Jazztel Plc is currently monitored by Orange due to its 1.4 million broadband customers, even though it is quite an expensive target.

One of the analysts, who work for Raymond James Euro Equities – Stephane Beyazian, said for Bloomberg: “This could well be the year when we see some real consolidation taking place in the Spanish telecommunications industry. Jazztel is getting quite expensive but it could still make sense for Orange to buy it.”

Orange is considered as the third-largest wireless carrier in Spain behind Telefonica SA and Vodafone Group Plc. Such a move would emphasize on the increasing landline assets demand, which are needed to provide combined broadband, TV and wireless packages. As reported by Bloomberg, this month, the cable provider Grupo Corporativo ONO SA announced that it is proceeding with a plan to pursue an initial public offering.

The sale of the Yoigo unit, which was initially scheduled for April, was cancelled by TeliaSonera, the largest phone operator in Sweden. The company did not manage to attract high enough offers from its bidders. The Chief Executive Officer of TeliaSonera – Johan Dennelind – said on a conference call on January the 30th that the company is focused on building and consolidating a stronger position in Spain.

Orange SAs spokesman Olivier Emberger, Jazztel Plcs spokeswoman Beatriz Valverde, as well as Yoigos spokeswoman Masha Lloyd refused to make any comments on the rumours.

Orange SA were mostly unchanged at EUR 9.3010 in Paris at 12:01 GMT,down 0.02%, marking a market capitalization of 24.6 billion euros.