Orange and T-Mobile Merger in the UK
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Case Details:
Case Code : BSTR354
Case Length : 14 Pages
Period : 2007-2009
Pub Date : 2009
Teaching Note :Not Available
Organization : Orange UK / T-Mobile UK
Industry : Telecom
Countries : 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.
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Excerpts Contd...
The Deal
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Under the deal, it was decided that T-Mobile and Orange would be merged to form a 50:50 JV. To create the JV, Deutsche Telekom planned to contribute 50 percent stake in 3UK and gross tax losses carried forward, amounting to £ 1.5 billion...
The Synergies
The main benefit to France Telecom was that Orange's merger with T-Mobile would fortify its presence in the UK telecom market. Analysts felt that France Telecom could strengthen its presence without incurring additional costs or debts. Moreover, Orange would attain efficiencies in operation and increase its market share in the UK, they said...
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Some Initial Reactions
The Orange-T-Mobile merger received mixed reactions from employees, consumer groups, analysts, and the government. Since the combined entity was expected to have 19,000 workers
- 12,500 employees from Orange and 6,500 from T-Mobile, the employees feared that there would be lay offs...
Outlook
Despite receiving a mixed response from several quarters, Orange and T-Mobile maintained that the combined entity would bring in a lot of benefits to the consumers including offers of bundled telecom offerings and better network coverage. It would also aim to enhance the indoor and outdoor quality of network for 2G and 3G services, they said...
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