Deutsche Telekom is said to be exploring the possibility of a merger with French telecoms giant Orange Group, Reuters writes citing German business newspaper Handelsblatt. According to unnamed sources familiar with the matter, the plan is at an early stage, with the potential merger taking the form of a share swap, as neither side could afford a classic takeover. Deutsche Telekom declined to comment on the matter, while an Orange spokesperson said that ‘there are no ideas or discussions going on’ regarding such an initiative.
Deutsche Telekom is Europe’s biggest telecoms company with a market capitalisation of around EUR72 billion (USD79 billion), while Paris-listed Orange is worth around EUR40 billion. The two companies previously operated UK-based EE, formed by the merger of their respective operations in the country, though the unit was subsequently sold in early 2016 to BT Group in exchange for shares in the parent company. The companies currently have overlapping operations in Poland, Slovakia and Romania, though in September 2019 Deutsche Telekom reportedly received the Romanian government’s approval to sell Telekom Romania Communications (formerly RomTelecom) to Orange Romania.