Major French Telecom Bid Rejected
Altice France, the owner of telecommunications firm SFR, has reportedly rejected a substantial joint bid from three French rivals, according to internal communications obtained by Reuters. CEO Arthur Dreyfuss informed staff through a memo that the company immediately turned down the non-binding offer valued at 17 billion euros ($19.8 billion) for most of Altice France’s assets, which would have valued the entire company at approximately 21 billion euros.
Market Reaction and Regulatory Concerns
The rejected bid had initially spurred positive market movement, with shares of Bouygues reaching their highest price in over seven years before slightly paring gains after Altice’s rejection. According to reports, Orange’s shares remained up 3%, while the broader French market index gained over 2%. Italian telecommunications company Telecom Italia also saw a 2.4% increase, suggesting the news had broader European implications.
French Finance Minister Roland Lescure indicated he would be “extremely vigilant” about any potential deal, emphasizing concerns about consumer prices and service quality. “There’s a competition authority; it’s independent. It’s there to protect consumers, and it will do so,” Lescure stated in a radio interview. The French government’s position is particularly significant given its status as the largest investor in Orange.
European Telecom Consolidation Landscape
The joint bid from Bouygues Telecom, Iliad’s Free, and Orange had raised expectations for increased sector consolidation across Europe. Analysts suggest that reducing the number of major mobile network operators in France from four to three would require approval from European or French regulators, following a pattern seen in other markets.
Sources indicate that the European Commission approved a similar 4-to-3 merger in Spain last year, though it required significant remedies from MasMovil and Orange to create the 18-billion-euro MasOrange operator. French antitrust agency chief Benoit Coeure had previously stated that any deal involving SFR would be examined “without prejudice, but without ignoring difficulties either.”
Analyst Perspectives and Broader Implications
J.P. Morgan analysts reportedly described the 17-billion-euro offer as better than expected in a research note. Meanwhile, industry observers suggest that a successful deal for SFR might trigger consolidation in other European markets. Giorgio Tavolini from Italian brokerage firm Intermonte noted that Iliad might consider selling its operations in Italy to focus resources on the French market.
“It would make sense for the group to leave Italy – where it does not generate cash, once spectrum costs are considered, to focus its resources on the French market,” Tavolini stated in his daily report. This perspective highlights how the telecommunications industry is increasingly looking at cross-border consolidation opportunities.
Industry Context and Future Prospects
SFR remains France’s second-largest telecom provider with substantial market presence, including more than 19 million mobile subscribers and 6.1 million fibre customers as of June. The rejection of this major bid raises questions about the future of market consolidation in the European telecom sector and whether alternative offers might emerge.
According to industry reports, the French telecommunications market has maintained four major mobile network operators since 2012, and any reduction to three operators would represent a significant structural shift. The immediate rejection suggests Altice France may have alternative strategic plans for its assets, though market observers will be watching closely for further developments in this evolving situation.
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