The French telecom industry might undergo some important changes if Numericable-SFR’s reported 10 billion euro all-cash bid to buy competitor Bouygues Telecom manages to go through. The buyout would make the joint company the biggest mobile operator in France, possibly putting an end to the intense four-way competition from recent years which devolved into an unhealthy war on prices.
Individuals with knowledge of the negotiations said that Numericable-SFR secured the high cash amount from BNP Paribas, through the owner of its parent company Altice, multibillionaire Patrick Drahi. Other sources have also informed the Financial Times that the negotiations between the two mobile giants are at a very advanced state, with Bouygues reportedly scheduling a board meeting for Thursday.
The potential deal isn’t viewed positively by France’s Minister of Economy, with minister Emmanuel Macron stating that the timing for such a move was not right for public interest, and that he would not support such a deal.
It remains to be seen though if Martin Bouygues, the owner of the entire Bouygues conglomerate will be willing to part with his telecom division this time around. Bouygues Telecom have lost a bid battle with Drahi’s Altice last year for the takeover of mobile operators SFR, but Mr. Bouygues has since refused several bids from Iliad and Numericable-SFR itself. The last rejected bid from Numericable was at the beginning of the year and was worth 9 billion euros.
However, Mr. Bouygues might go through with the deal this time around, as it represents twice the value of any bid for Bouygues Telecom made by other companies excepting Numericable-SFR. A 2014 bid worth 5 billion euros from Xavier Niel’s Iliad, the fourth largest French mobile operator, was similarly rejected by the Bouygues conglomerate.
None of the companies of people who are reportedly involved in the talks have made any official statements until now, declining to comment on the situation to French media outlets.
The French state is preparing to put more than six blocks of data spectrum on sale for operators in a bid to raise at least 2.5 billion euros for the country’s budget, with Iliad reportedly being interested both in them and spectrum that would eventually be sold after the eventual merger.
Orange, who is France’s top mobile operator, could also get tangled in the deal as rumors suggest that it would offer employment to Bouygues Telecom staff that would be laid off, one of the biggest concerns of the French government regarding the deal. However, the operator has said on Sunday that it is not part of the discussions and it will not take on employees if it doesn’t provide any value for it.
Image Source: The Baltimore Sun
