April 17 (Reuters) - French telecoms operators Bouygues, Iliad-Free and Orange have submitted an improved 20.35 billion euro ($23.97 billion) offer to buy rival SFR from Altice France, the suitors
French telecoms trio lift SFR bid to $24 billion in sector shake-up
Major Telecom Deal and Its Implications
By Gianluca Lo Nostro, Elvira Pollina and Mathieu Rosemain
Revised Bid and Deal Structure
PARIS, April 17 (Reuters) - Bouygues, Iliad-Free and Orange raised their bid for French telecoms operators SFR to 20.35 billion euros ($23.97 billion) on Friday, in what if successful would be one of the biggest European telecom deals in recent years.
The trio's proposed transaction would cut the number of mobile network operators in France to three from four, setting up a key test for regulators' willingness to allow consolidation in a crowded European telecoms market, where operators have long argued that scale is needed to sustain investment.
Patrick Drahi's Exit
It would also mark the full exit from SFR of billionaire Patrick Drahi, who has been cast as the French equivalent of John Malone, who was known for his complex dealmaking.
Negotiation Process
After roughly five weeks of due diligence, the consortium returned with a revised bid below Drahi’s expectations before both sides spent about two weeks bridging the gap to reach a final price, a source close to the matter told Reuters.
Legal Protections and Asset Structure
Talks also covered legal protections tied to the assets, sources said. The consortium compiled a list of identified legal risks, two sources said, adding that they had negotiated a protection mechanism with Altice France covering those risks.
The proposed structure would give Bouygues Telecom a 42% stake in SFR, with Iliad and Orange taking 31% and 27% respectively. Other assets, mainly fibre infrastructure and SFR’s overseas operations, are not included in the offer.
Regulatory and Political Scrutiny
Approval Process
REGULATORY, POLITICAL SCRUTINY LIES AHEAD
Any deal would be subject to consultation with the relevant employee representative bodies and would then need clearance from antitrust authorities, the bidders said, adding that an exclusivity period for negotiations lasts until May 15.
If it goes ahead, the deal will face intense scrutiny from French and European competition authorities.
Antitrust Reviews
Each operator acquiring a portion of SFR will undergo a separate antitrust review, an Orange spokesperson said.
Government Oversight
France’s Finance Ministry said it would remain “extremely vigilant” regarding jobs, consumer prices and continued network investment.
European Market Implications
Allowing France to move from four to three operators without asset sales — using behavioural remedies like wholesale access instead — could set a precedent for consolidation across Europe, including in Italy, Spain and Germany, Intermonte analysts said.
A European Commission spokesperson said it had not yet been formally notified.
Financial Impact and Market Reaction
Financing the Deal
Orange expects to finance its share through debt without impacting its balance sheet and aims to reach an agreement before summer, a source familiar with the matter said.
Stock Market Response
Bouygues shares were down 1.3% after the announcement, while Orange fell 3.6%, as JPMorgan said investors may worry the bidders are overpaying for the assets.
($1 = 0.8488 euros)
(Reporting by Gianluca Lo Nostro, Elvira Pollina, Mathieu Rosemain and Leo Marchandon; Additional reporting by Inti Landauro, Makini Brice; Editing by David Goodman and Alexander Smith)
