Orange and T-Mobile Merger in the UK


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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:

Price:

Case Code : BSTR354 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges

Themes

Mergers and Acquisitions / Joint Ventures
Case Length : 14 Pages
Period : 2007-2009
Pub Date : 2009
Teaching Note : Not Available
Organization : Orange UK / T-Mobile UK
Industry : Telecom
Countries : UK

Abstract:

In late 2009, Germany-based telecommunications company, Deutsche Telekom, and France-based telecommunications company, France Telecom, announced their plans to merge their UK subsidiaries - Orange and T-Mobile. The companies planned to create a 50:50 joint venture in a bid to combat competition from players like O2 and Vodafone UK. The synergies from the merger were expected to benefit both Orange and T-Mobile. The merger would help Orange gain a stronger foothold in the UK market while T-Mobile would enhance its brand value and offer better service to its customers. The JV also offered substantial benefits to the consumers in terms of better network coverage, broader distribution network, and improved customer services.

Some analysts felt that the new venture would create some sort of monopoly in the market and threaten the survival of the existing players in the UK. On the other hand, some analysts raised doubts over the success of the merger citing cultural differences between the two companies.

Issues:

» Understand and discuss the rationale behind the Orange and T-Mobile merger in the UK.
» Discuss the advantages and disadvantages of this decision from both Orange and T-Mobile's view.
» Identify the challenges the joint venture is going to face in the future and explore strategies it can adopt to overcome the challenges.

Contents:

  Page No.
Introduction 1
The Telecom Market in The UK 2
About Orange UK 5
About T-Mobile UK 6
The Rationale for the Merger 6
The Deal 7
The Synergies 8
Some Initial Reactions 10
Outlook 11

Keywords:

Merger, Acquisition, Joint venture, Post merger integration, Telecommunications market, UK, Orange, T-Mobile, France Telecom, Deutsche Telekom, Vodafone, O2, Global economic slowdown, Fair Trading

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