In a dramatic rejection that could reshape the French telecommunications landscape, Altice owner Patrick Drahi has immediately turned down a €17 billion offer for the company’s SFR mobile unit. The bid came from a consortium comprising France’s three major telecommunications companies – Orange, Bouygues Telecom, and Free – in what would represent one of Europe’s most significant telecom market consolidations.
The Consortium Offer and Market Implications
According to initial reports from the Financial Times, the three French telcos proposed splitting SFR’s assets among themselves, effectively reducing the number of major mobile operators in France from four to three. The deal structure would have seen SFR’s consumer business, including both mobile and fixed-line broadband customers, divided between the consortium members. Additional assets such as SFR’s fixed-line network infrastructure and valuable mobile spectrum would also have been distributed among the bidding companies.
The financial breakdown of the proposed transaction revealed Bouygues Telecom would have contributed 43 percent of the total euro-denominated offer, while Free would have paid 30 percent and Orange 27 percent. This distribution reflects the strategic value each company placed on acquiring portions of SFR’s operations and customer base.
Patrick Drahi’s Immediate Rejection and Strategic Position
Patrick Drahi, the controlling shareholder of Altice, wasted no time in rejecting the consortium’s approach. The rejection was first reported by Bloomberg and subsequently confirmed by Orange representatives. Industry analysts suggest the €17 billion offer fell significantly short of Drahi’s valuation expectations, which are believed to approach €30 billion for the French mobile operator.
The rejection comes despite Altice’s pressing need to address its substantial debt burden, which currently stands at approximately €15.5 billion following a recent debt restructuring. SFR represents one of Altice’s most valuable assets, serving approximately 26 million mobile customers across France and generating substantial recurring revenue.
Market Consolidation Dynamics and Regulatory Considerations
The proposed acquisition would have represented the most significant consolidation in the French telecommunications market in recent years. Orange CEO Christel Heydemann had previously expressed support for market consolidation, stating in July that “we do see a need for consolidation” in both France and Europe broadly. The reduction from four to three major operators would have likely reduced competitive pressures in the market, potentially leading to higher prices for consumers but improved margins for the remaining operators.
Bouygues Telecom stood to gain particularly significant advantages from the proposed deal, given the company’s existing RAN infrastructure sharing agreement with Altice. The integration of SFR’s assets would have created substantial operational synergies and expanded Bouygues’ market presence considerably.
Altice’s Broader Asset Strategy and Debt Management
Altice has been actively pursuing asset sales across its global portfolio as part of a broader strategy to manage its debt position. The company recently completed the sale of its 24.5 percent stake in UK telecommunications giant BT to Bharti Airtel in a transaction valued at approximately $4 billion. Interestingly, Drahi had only increased Altice UK’s stake in BT to 24.5 percent in May 2023 and had previously indicated plans to raise the holding to nearly 30 percent before reversing course.
The company has also been restructuring its data center operations, spinning off its French data center assets into a separate entity comprising more than 250 facilities before selling the business to Morgan Stanley. This pattern of asset monetization extends to Altice’s Portuguese operations, where the company has been exploring the sale of its mobile unit and data center business in the country.
Industry Context and Future Implications
The rejected bid occurs against a backdrop of significant activity in European telecommunications and adjacent sectors. Recent developments include LVMH’s strong financial performance and AT&T’s nationwide 5G standalone network deployment in the United States. Meanwhile, financial market innovations continue globally, as evidenced by the expansion of corporate bond repo platforms in India.
The future of SFR and Altice’s French operations remains uncertain following Drahi’s rejection. While the company continues to seek ways to reduce its debt burden, the immediate dismissal of a substantial offer suggests Drahi remains confident in SFR’s standalone value and potential. Market observers will be watching closely to see whether the consortium returns with an improved offer or whether other potential buyers emerge for all or parts of SFR’s operations.
The situation highlights the complex balancing act facing telecommunications operators globally as they navigate substantial infrastructure investments, competitive pressures, and shareholder expectations in an industry undergoing rapid technological transformation.
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