French Telecom Giants Revive Altice Talks

Orange, Bouygues, and Iliad enter negotiations again with each other following the pressure to consolidate the telecom markets in France.

The top operators in France, Orange, Bouygues Telecom, and Iliad-owned Free, have all confirmed that they are once again in talks to acquire a substantial share of Altice Group's French telecommunications holdings, with fresh momentum from the changing telecom environment in the country.

The companies in a joint statement declared that due diligence was initiated at the onset of January, and they also warned that no deal has been conclusively made because legal and financial conditions are yet to be arranged. This negotiation is an addition to a previous bid of €17 billion in October, which was denied by Altice, the company owned by billionaire Patrick Drahi. According to media reports, a revised offer in the value of up to €20 billion might be visible in the next months.

SFR, which is the second-largest operator in the country, is owned by Altice France, and a sale would be a significant move as far as consolidation is concerned in the European telecommunications sector that is highly fragmented. Since 2012, France has had four mobile operators and this would have to go down to be approved by French and EU competition authorities.

The increased interest highlights mounting pressure throughout the telecom sector, such as the increased network investment expenditure and competition pricing. Earlier schemes envisioned Bouygues, Iliad, and Orange taking over the majority of the assets.

Even though the companies did not comment any more, investor reaction was quick. Orange and Bouygues were up over 3 and 2 percent, respectively, in opening trades in Paris, and the market seemed optimistic about possible telecom mergers and strategic refocus.