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France Telecom buys Orange cellular outfit in $45 billion deal

3Gs all round...

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Internet Security Threat Report 2014

Every now and again somebody buys Orange, the number three UK mobile phone business, and CEO Hans Snook gets another addition to his substantial wad. Not that we're suggesting this is anything more than a side-effect, of course. This time around it's France Telecom, which today announced that it will be paying Vodafone AirTouch 20 billion Euros in cash and 20 billion in stock for Orange, and will take on debt of about 4 billion Euros and pay Orange's 4.5 billion tab for the UK 3G licence.

So off we go on the next phase of the mobile network consolidation process. Vodafone had to get rid of Orange when it bought Mannessmann, which itself had shortly earlier bought Orange. Snook has been throwing his weight around in the interim, wanting Orange to regain its independence rather than being the subject of a trade sale, but the France Telecom deal must nevertheless suit him mightily.

France Telecom intends to merge Orange into its own cellular business, which includes market leader Itineris (which is head-to-head with Vodafone's chums at SFR-Vivendi), and then to list the new company in Paris, London and the US. Snook will be in charge, but rather than running a cheeky upstart, which was the case prior to Mannessmann, he'll be steering one of the world's biggest mobile phone operations, backed by a telco with very deep (and it has to be said, sometimes overly mysterious) pockets.

Despite the money France Telecom found itself blitzed out of the UK 3G licence auction, but by listing the merged cellular company it'll be in a better position to bounce back in the French licence round, and elsewhere in Europe. ®

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