Telecom Italia Shares Scale Up on Orange Deal Interest
Published By : 02 Mar 2015 | Published By : QYRESEARCH
Telecom Italia shares raised as much as 3% on Monday 02, 2015, after the boss of Orange, Mr. Stephane Richard stated that an amalgam with the Italian firm would be attractive. The spokesman of the Telecom Italia stated that no talks over a deal had happened.
The Telecom Italia shares were up by 2.4% at euros. 1.092. Shares in France based Orange was down by 0.3% to 16.24 euros. Telecom firms in Europe have been in a dealing frenzy from 2013 as they want to exit the non core industries, join fixed and mobile services, and cut down costs.
But till date, not a single big cross border deals have combined with the telecom giants. Although the European regulators would like to watch the regional biggies emerge to initiate the much required broadband investments. Industry executives have long stated that while key synergies can be gathered from in-trading consolidation, the case is much less obvious for cross border deals, in which the savings cannot be done from joining networks and commercial functions.
The Chief Financial Officer of Orange, Mr. Ramon Fernandez in an interview at Mobile World Congress held in Barcelona, admitted that the period of consolidation is not yet done. The national markets will reduce further and then there will be a question of if there will be cross border deals or not. However, before that happens, it remains to be seen if there is the real value to be maintained with such deals.
Telecom Italia that is seriously indebted but benefits from high profit limits in its home country where there is no cable opposition could become a target for the buyer, bankers have stated. It also controls Tim Participacoes of Brazil, which have been seen as a takeover target as well. Bankers believe that Telecom Italia would be a more striking prospect for a European provider if it exited Brazil, and utilized the proceeds to pay down the debt.