Telecom Titans Bid to Reshape French Market: SFR’s Fate Hangs in Balance

Towards the disappearance of SFR? Orange, Bouygues Telecom and Free have offered Patrick Drahi, the owner of Altice France, the parent company of SFR, a check for 17 billion euros to buy the majority of his group, more precisely the essential part of the operator with the red square, the three telecom groups announced in a press release. However, some subsidiaries - including XP Fibre, its vast fiber network in sparsely populated areas, or its Intelcia subsidiary, the Moroccan giant of call centers, are not included.

Their check "reflects an indicative enterprise value [...] for the whole of Altice France of 21 billion euros," the same source specified.

According to a source close to the buyers quoted by the newspaper Le Monde, it is "credible", "rather generous for the shareholders", and "allows to secure the creditors and to repay 100% of the debt". "It is [...] beneficial for the seller, as it offers an attractive valuation," added Olivier Roussat, CEO of the Bouygues group, the parent company of Bouygues Telecom, on Tuesday, October 14, during a telephone press conference. A potential acquisition of SFR could lead to its disappearance and the market of four players could go down to three.

Will Drahi, who at the beginning of the month completed a vast financial restructuring to reduce the huge debt that threatened his group, from 24 to 15.5 billion euros, accept this offer? "The day there are [offers], we will study them without any taboo, without any totem," said Arthur Dreyfuss, the CEO of Altice France, on October 1st. But the acquisition and complete dismantling of SFR could prove arduous. "This is an operation that, in all likelihood, would not be completed before the second quarter of 2027," Roussat points out. In the event of acceptance by Drahi, Orange, Bouygues Telecom and Free should ensure that the commercial and financial information they have on Altice is accurate, he specifies, before submitting "a firm offer".

Next step: the government should scrutinize this acquisition. Various authorities, including Arcep, the telecom regulator, and especially those in charge of competition, should do the same. Except that they may not give the green light because they generally fear that a concentration of the market will lead to significant price increases. Roussat is aware that this acquisition is not a foregone conclusion. At this stage, "this process [...] has no guarantee of success," the executive insists.