Two French operators merge 05-14-05

Cegetel and Neuf Telecom (France) announced merger plans. The new entity is called Neuf Cegetel. SFR (Vivendi) will held 28% of the new entity, Neuf Telecom 44% (main shareholders are Telecom Italia, Suez et Belgacom) and Louis Dreyfus 28%. Former shareholder in Cegetel, SNCF, will go out. Neuf Cegetel would realize 2005 revenues of some €2.8bn and will have about 3800 people. As the two entities have many redundancies, unions are feared by restructuring with about 1000 layoffs. After more than one year talking, the merger is first a marriage of convenience as the two companies are working on the same markets (voice and ADSL) and face fierce competition. The new entity will count some 840k ADSl subscribers and be number 3 with about 13% market share in the French market behind FT and Free. It also has 3.1m customers in fixed telephony and ranks 3, behind FT and Tele2. Jacques Veyrat, current CEO of Neuf Telecom, is believed to head Neuf Cegetel.