By Gianluca Lo Nostro and Elvira Pollina April 17 (Reuters) - A sweetened 20.35 billion euro ($24 billion) joint bid by Bouygues Telecom, Iliad-owned Free and Orange for France's second-largest
French Telecoms Giants' $24 Billion SFR Joint Bid to Test EU Regulations
Overview of the SFR Joint Bid and Regulatory Implications
By Gianluca Lo Nostro and Elvira Pollina
April 17 (Reuters) - A sweetened 20.35 billion euro ($24 billion) joint bid by Bouygues Telecom, Iliad-owned Free and Orange for France's second-largest telecoms operator SFR looks set to test the European Union's regulatory resolve.
Regulators have long drawn a red line to maintain four operators per country, resisting pressure for consolidation to match more dominant U.S. and Asian competitors.
Each operator acquiring a portion of SFR will face a separate antitrust review, an Orange spokesperson told Reuters.
The three companies submitted their joint offer to buy most of Altice France's assets on Friday, after their earlier 17 billion euro offer was rejected by SFR parent Altice in October.
A successful deal for SFR, which is backed by billionaire Patrick Drahi, would shake up one of the most competitive telecoms markets in Europe. Operators in France have been locked in price wars for years, pressuring margins and revenue growth.
A European Commission spokesperson said it had not been formally notified of the proposed transaction.
"If a transaction constitutes a merger and has an EU dimension, it is always up to the companies to notify it to the Commission," the spokesperson added.
Key Issues at Stake
WHAT IS AT STAKE?
EU Antitrust Concerns
EU antitrust regulators have imposed tough remedies and outright blocks on telecoms deals that proposed reducing the number of mobile network operators from four to three in a single country market, with a view to safeguarding competition and avoiding price increases.
Calls for Regulatory Reform
However, a 2024 EU report on the bloc's competitiveness urged regulators to ease a stance that had resulted in a highly fragmented sector, and instead focus on helping businesses gain scale and compete with U.S. and Chinese rivals.
This echoed some calls by sector CEOs for the EU to facilitate mergers by assessing deals on a regional rather than national level and to take into account investment plans.
The European Commission has been looking to pan-European deal approvals to help boost scale, Reuters has reported.
Regulatory Review Process
WHO WOULD REVIEW AN SFR DEAL?
European Commission's Role
Acquiring Altice's French assets would likely face a review by the European Commission, which has 25 working days after a deal is filed for a first-stage review. It may extend by 35 working days, to consider either proposed remedies or a member state's request to handle the case.
