Private Equity Group CVC Bids Over $2 Billion for Orange Switzerland

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Despite resistance from France Telecon, international multimedia news agency Reuters reports that leading private equity group CVC is planning to offer a bid for Orange Switzerland, Switzerland's third-largest mobile phone company. Reuters said that this information was obtained from sources close to the situation.

The sources said that the interested parties were soon going to get details of the sales information. And that the sale could fetch about 1.5 billion euros ($2.04 billion USD) for France Telecom.

Similarly, as per the Reuters report, Egyptian billionaire Naguib Sawiris is also interested in buying the Swiss phone company, according to sources close to the tycoon. In addition, a number of private equity firms are also interested in bidding, wrote Reuters.

One such source told Reuters that the first-round bids would probably begin later this month or early October. According to reporters Simon Meads and Victoria Howley, CVC is interested in merging it with Sunrise and making it Switzerland's second mobile company behind Swisscom -- thus, creating a phone company that can directly compete with the country’s largest mobile phone company.

Based on the information provided by these sources, Simon Meads and Victoria Howley wrote that France Telecom is concerned about CVC's presence in the auction as it would deter other potential bidders. Plus, any tie-up between Orange Switzerland and Sunrise would again hit regulatory hurdles because a similar attempt by France Telecom to merge the two businesses failed in 2010 after competition regulators ruled that such a merger would be bad for consumers.

A year later, Sunrise was bought by CVC for $3.3 billion. Meanwhile, CVC has had conversations with other potential bidders about buying or merging with Orange at a later date, sources told Reuters. "There are massive synergies. It's hugely logical for CVC to want to do this, the question 'is what's the best way of getting it done'," said to a source, wrote Reuters.

While CVC was not available to comment on this situation, France Telecom declined to make any comments, wrote Simon Meads and Victoria Howley.

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Ashok Bindra is a veteran writer and editor with more than 25 years of editorial experience covering RF/wireless technologies, semiconductors and power electronics. To read more of his articles, please visit his columnist page.

Edited by Tammy Wolf

TechZone360 Contributor

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