Orange reaches deal with Israel's Partner after spat
French mobile company Orange reached a deal with Israel's Partner to retake control of its brand, it said in a statement Tuesday, as it seeks to move on from a major diplomatic spat.
Orange will pay up to 90 million Euros ($100 million) to regain direct control of the brand in Israel within two years, which had been licensed to Partner until 2025. The agreement sets out a 24 month time frame under which either company can formally renounce the previous deal, during which a market study will be undertaken on Partner's future positioning and activity under its own branding.
"If Partner does not exercise its right to terminate within 12 months, either Partner or Orange may terminate the Brand Licensing Agreement during the following 12 months," Orange's statement said. "The agreement provides for total payments of 40 million Euros to Partner from signing the agreement until completion of the market study, and an additional 50 million Euros should the BLA be terminated within 24 months."
Despite the looming renunciation of their original contract prematurely, executives said negotiations were cooperative and cordial. "The discussions were pragmatic, carried out in an amicable atmosphere and the two parties have reached a satisfactory mutual agreement," said Pierre Louette, Orange's vice director general.
"We are pleased to have reached a new agreement with Orange further to our 17-year relationship with the brand and to have established a new framework for our future relationship with Orange," said Adam Chesnoff, chairman of Partner's board.
Given the considerable length of the initial agreement, Louette said striking a new deal had become inevitable. Of the roughly 30 countries in which Orange is present, Israel is the only market where the French company does not own the rights to or manage development of its brand name.
"It was a situation inherited from a previous contract that gave a near-eternal right of usage [of the name]" said Louette. "We had a chance to regain the brand more quickly, which is a good thing."
Attempts by the French company to recover use of its Orange brand in Israel had led to major diplomatic strife after the head of the company, Stephane Richard, made comments that were interpreted as a desire to boycott Israel for political reasons. On June 3, Richard told a conference in Cairo that he would break the relationship with Partner immediately if it was legally possible, which was seen as support for a Palestinian-led boycott campaign.
His comments came after French non-governmental organisations and trade unions accused Partner of building on confiscated Palestinian land. In doing so they urged Orange to cut business ties to Partner, and publicly declare its desire to avoid contributing to the economic viability of the settlements.
A furious Israeli Prime Minister Benjamin Netanyahu slammed the move by the partially state-owned French telecoms group as "miserable". Richard later said his comments were misinterpreted and that he did not support any kind of boycott. He travelled for talks with Israeli leaders in a bid to smooth over the controversy.
Orange says its intention all along was to develop closer links to Israel, particularly related to research and development. Richard is suing over death threats against him and his family over the affair.