Orange is studying a purchase of smaller French rival Bouygues Telecom and is in talks with conglomerate parent Bouygues, Les Echos said on its website on Thursday, as the government pushes for consolidation in the sector, reports Reuters.
Stephane Richard and Martin Bouygues, the chief executives of the two groups, have discussed the matter several times, with the government kept informed, the daily newspaper said. The state owns 27 percent of Orange.
The deal would value Bouygues Telecom at more than 6 billion euros ($8.23 billion), and by selling in return for shares, Bouygues and its shareholder JCDecaux could end up holding close to 10 percent of Orange, Les Echos said.
"We're weighing up our options, but no one on the government side has asked me to study the takeover of Bouygues Telecom," Les Echos quoted Richard as saying.
French Economy Minister Arnaud Montebourg said this week the government would reduce to three the number of domestic telecom players, stressing tough competition in the sector was hurting jobs and investment in high-speed broadband.
The government earlier this year backed a bid from Bouygues to take over Vivendi's SFR telecom unit and combine it with Bouygues Telecom, but Vivendi chose cable firm Numericable , leaving the number of mobile operators at four.
Read more of this report from Reuters.