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Israel protested to France after Orange's Chief Executive,
Stephane Richard, said earlier this month he would terminate the
licensing arrangement with Partner "tomorrow morning" if the
contracts allowed.
Specifically, the controversy surrounds economic activities in
Israeli settlements of the occupied Palestinian territories
which France and the European Union consider illegal. Orange is
25 percent owned by the French government.
Richard later apologized to Israeli Prime Minister Benjamin
Netanyahu and said his comments, made during a visit to Egypt,
had been misinterpreted to suggest that he supported an outright
boycott of Israel for political reasons.
Orange later explained the comments as reflecting a broader
desire and strategy of not licensing its brand where it was not
directly in control of the business.
Partner pays a fee to use Orange's brand in Israel.
Under the new deal, if Partner does not exercise its right to
terminate their brand agreement within 12 months, either Partner
or Orange could terminate it during the following 12 months,
Orange said in a statement.
Should the branding agreement be terminated, Orange would
rebrand its research and development operations in Israel under
its own name.
"For Orange, Israel is a strategically important country and we
have a long-term commitment to it, including our innovation
activities through the Orange affiliates in Israel," Orange
deputy CEO, Pierre Louette, said in the statement.
It said it had agreed to pay Partner 40 million euros ($44.7
million) while a market study is carried out on Partner's
position and an additional 50 million could be paid out should
the agreement be terminated within 24 months.
(Reporting by Leigh Thomas; Additional reporting by Tova Cohen
in Tel Aviv; Editing by Susan Fenton)
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