Government left owning 20% stake in the combined operator
Orange Romania has agreed to a full merger of its mobile and fixed operations, with the Romanian Government owning a 20% stake in the combined operator. The government approved the merger in December between Orange Romania, the largest telecom group in the country, and Orange Romania Communications, the former state telecom company Romtelecom, in which Orange owns 54% of the shares and the Romanian state holds the remaining 46% through the Ministry of Research, Innovation and Digitalisation.
The merger follows more than a year of protracted discussions around the merger terms. Discussions kicked off after Orange had bought the majority stake of the former Romtelecom from OTE and Deutsche Telekom. According to the new agreement, both parties have agreed on a structure in which Orange will hold 80% of the share capital and 80% of the voting rights in the resulting entity, while the government will hold 20% of the share capital and 20% of the voting rights.
Orange Romania reported individual revenues of €1.2 billion in 2022 and is the number one mobile operator in Romania, while Orange Romania Communications, one of the largest fixed line operators in Romania, reported revenues of €513 million in 2022. Completion of the transaction is expected in the first half of 2024.
“The signing of this agreement will strengthen our position on the Romanian market and bring us closer to being a fully converged telecom operator for our residential and business customers,” said EVP and CEO of Orange in Europe Mari-Noëlle Jégo-Laveissière. “I want to thank the Government of Romania, our key partner, and our involved teams for this achievement.”
“[The agreement] marks a crucial moment in the company’s history and confirms the confidence of the Ministry of Research, Innovation and Digitalisation in our strategic ambitions, in project and in the team,” added Orange Romania CEO Julien Ducarroz (above), the ex-Orange Poland CEO who swapped country leadership roles with Liudmila Climoc in September.
Ducarroz’s appointment marked a return to the operator’s Romanian subsidiary where he held roles as strategy director and chief commercial officer between 2007 and 2016. The executive was appointed Orange Moldova CEO in 2016 before he took up his Polish role in 2020. Under his leadership, the Polish unit formed a €605 million fibre joint-venture. “Now, with united forces, we accelerate towards the fulfilment of the common goal: to be the first option for fixed-mobile services in Romania,” he said.