Telecom shares wobble as Bouygues-Orange deal collapses
European telecom stocks have stumbled after a deal to create France's biggest telecoms group collapsed.
French operators Orange and Bouygues Telecom ended talks late on Friday over the reported €10bn (£8bn) merger.
The potential merger of Orange with its smaller rival Bouygues was intended to prop up profits and would have reduced the number of mobile operators from four to three in France.
Analysts at Deutsche Bank said Orange had set clear conditions that were not met during talks, while Bouygues identified four reasons for the failure, including execution risk and governance.
"We believe that this was one of the last chances for consolidation within the French telecoms market," analysts at Berenberg said.
The Stoxx index of 600 European telecoms firms was down slightly in afternoon trading, amid heavy falls among other French telecoms stocks.