PARIS (Reuters) - France's state-controlled telecoms group Orange (PA:ORAN) signed a confidentiality agreement with conglomerate Bouygues (PA:BOUY) with a view to buying its telecoms arm for 10 billion euros ($10.86 billion) in cash and shares, a French newspaper said on Sunday.
Bouygues would receive a 15 percent stake in Orange valued at 8 billion euros and the remaining 2 billion euros in cash, Le Journal du Dimanche said, citing several unnamed sources.
"The teams get along well, the talks are advancing, we'll know quickly whether we can go all the way," one source was quoted as saying.
Neither Orange nor Bouygues were immediately available for comment on Sunday.
A source familiar with the situation told Reuters last month that during a seminar with his board and executive committee, Orange chief executive Stephane Richard had mentioned new talks with Bouygues about the future of its telecom unit.
A deal would reduce the number of telecom firms in France from four to three and would create a new giant that would have a 50 percent market share in fixed and mobile.
