​Orange Romania has a team of multidisciplinary consultants under the auspices of an international investment bank in the process of merging Telekom România Fix (formerly Romtelecom), so the Ministry of Digitalization wants to respond appropriately by acquiring consulting services that will be supported. in this process.

This information is contained in the specifications of the tender recently launched by the Ministry of Research, Innovation and Digitization, which is headed by the Liberal Sébastien Bourduilla.

Sebastian Bourduya: A new company will be created. Advice is needed to take into account the interests of the state as much as possible

• “Currently, the Romanian state, through MCID, is a shareholder of Orange Romania Communications (formerly Telekom Romania Communications, formerly Romtelecom), and a new company will be created after the merger process. The Ministry needs professional consulting services to protect the interests of the Romanian state as much as possible.
• I want as many companies as possible to participate in this auction, the best companies in the industry, to provide the best advice in such an important deal,” said Minister Sebastien Bourduilla.

The maximum estimated total purchase price is 4 million lei (without VAT)due date until December 31, 2023.

The Ministry of Digital Affairs says that due to their own structures, they do not have the necessary expertise and cannot ensure the unification process

Which firms could provide legal advice to the state and for what money

The Ministry of Digitalization found out in August of this year through public consultations, who and for what money can provide legal advice to the Romanian state in the process of the merger between the former Romtelecom (ex Telekom Romania Communications, where the state owns 46% of the shares) and Orange Romania.

The Ministry received non-binding offers from the following business entities (in alphabetical order):

• Botezatu Estrade & Associations SPARL;
• MPR Partners;
• Musat & Associates;
• We value business consultants.

The arithmetic mean of 3 out of 4 non-binding price offers was 4,437,157 lei without VAT.

Why does the state need these services: A brief history of the acquisition of Telekom Fix by Orange

Last fall, Orange, the largest telecommunications operator in Romania, completed the €295.6 million purchase of a majority 54% stake in Telekom Romania Communications (formerly Romtelecom) from the Greek OTE Group, with the Romanian state remaining with 46%.

In order not to affect competition, OTE also bought 30% of Telekom România Communications’ shares in the former Cosmote.

The former Romtelecom has since received new management and operates as a subsidiary of Orange, changing its name from Telekom Romania Communications to Orange Romania Communications.

Orange Group aims to become the largest operator of converged fixed and mobile services in Europe and announced that it intends to fully integrate the fixed operations of the former Telekom Fix under one company: Orange Romania.

This is only natural as Vodafone also fully integrated the former cable operator UPC after the acquisition.

As a state, a minority shareholder, Orange Romania wants to protect its interests in the future

This is also the reason why the state wants to purchase these legal consulting and information services. The objective is to develop a response strategy and determine the options it has as a significant minority shareholder to protect its interests and maximize the results obtained from the integration and merger process.

Services of the consulting firm include:

• Thorough analysis of the two companies (Orange Romania SA and Orange Romania Communications SA) from legal, financial, commercial, operational and technical points of view before the merger process, in order to assess their real situation and at the same time determine the value of the two companies, including risks and liabilities obligations/obligations of the partner company, in the case of Orange Romania SA (“Due Diligence” process).
• This Due Diligence will be based on information provided by the two companies through the Virtual Data Room (VDR).
• Financial and accounting restructuring in the capitals and balance sheets of the two companies, including the reflection of transactions created by the merger in the accounting records of the company resulting from the merger. Although Orange Romania SA will be the one to propose ways of adjustment, restructuring, accounting and fiscal treatment, MCID, through a consultant, the contractor must analyze their impact and agree to these proposals.
• Compilation and review of legal documentation for the merger in compliance with all applicable legal requirements. The legal process of a merger involves drafting and approving specific correspondence and documentation that is complex and dense. MCID, through a hired consultant, must ensure that the documentation developed is complete and complies with the applicable legal framework (for example, but not limited to: preparation of the merger documentation, which includes a detailed draft of the merger with its terms and conditions; legal and administrative formalities related to commercial register, publication in the Official Gazette; preparation of documentation related to the approval of the merger at the general meeting of shareholders of two companies; etc.).
• Inventory and assessment of elements of the nature of assets, liabilities and equity of the joining companies, the results of which were reflected in accounting, in accordance with current accounting regulations
• Participation in the development, negotiation and signing of both the Merger Agreement (a document that sets out in detail the terms and methods of the future merger, as well as the rights and obligations regarding it) and the new Shareholders’ Agreement to protect and maximize the interests of the Romanian state through MCID as a minority shareholder (a document that establishes the regime of corporate governance of the future merged company, as well as the rights and obligations of each shareholder in this regard).

Will the Romanian state own 20% of the future of Orange Romania?

It remains to be seen how much the Romanian state will ultimately own Orange Romania after the integration process of the former Telekom Romania Communications is completed.

HotNews.ro exclusively wrote in August 2020, before the completion of the Orange-OTE operation, citing government sources close to the operation, that the Romanian state, then represented by the Ministry of Transport and Communications, headed by Lucian Bode at the time, concluded an agreement in principle with the Orange group, according to which, after the acquisition and integration of fixed operations, the state will own 20% of the new company Orange Romania.

According to HotNews.ro’s sources, the Memorandum on the signing of this agreement in principle was presented at the government meeting that day, but the dates of this Memorandum are confidential.

The information was confirmed by government sources a year later, when the European Commission approved the transaction.

Ludmila Klimok, CEO of Orange Romania: We have an agreement with the government on a legal merger, but we do not have a written agreement

In March 2022, 6 months after the acquisition of Telekom Romania Communications was completed, Orange officials acknowledged that there was an agreement with the government regarding the merger process, but without providing details.

When asked by HotNews.ro to clarify whether there is an agreement in principle between the Orange group and the Romanian state, according to which Orange will fully integrate the former Romtelecom, and the Romanian state will hold 20% of the new entity, Marie-Noelle Jeho-Laveissiere then said that there is an intention to integrate , but there is no written agreement on this.

“There is an understanding that shareholders seek to achieve a legal merger. It is open and we are in discussions with government partners. We will share more detailed information when we receive it,” said Ludmila Klimok, CEO of Orange Romania, in March 2022.