Bouygues Telecom, Orange and the Free-iliad Group announced on Saturday that they have signed a memorandum of understanding (MoU) with Altice France to acquire the telecom operator SFR for €20.35 billion, including debt - equivalent to $23.44 billion using the exchange rate provided by the parties ($1 = 0.8681 euros).
The agreement follows intensified negotiations. The Bouygues-led consortium had said on Friday that, given the advances in talks, the parties had afforded themselves an additional 48 hours to finalize the necessary agreements. Altice France had earlier extended an exclusivity window for negotiations until June 5 from a prior May 16 deadline after the three prospective buyers increased their offer in April from roughly €17 billion.
If regulators give the green light, the transaction would stand among the largest European telecom deals in recent years. One immediate structural consequence noted by the companies is that a break-up of SFR would reduce the number of mobile network operators in France from four to three - a change that would directly test antitrust authorities' readiness to permit consolidation in a densely populated European telecom market.
Orange's chief executive, Christel Heydemann, said in April that the company had opened regulatory discussions ahead of the proposed deal and highlighted behavioural remedies as a potential path to securing approval.
Financial terms within the MoU specify how the purchase price will be split among the buyers: roughly 42% for Bouygues Telecom, about 31% for the Free-iliad Group and around 27% for Orange. The memorandum also includes provisions for break-up fees, set in a range that runs from €0.1 billion to €2 billion.
Market indicators included with the announcement showed Bouygues shares up 0.7% and Orange shares down 0.34% at the time of reporting.
Summary of the transaction and procedural status:
- MoU signed on Saturday between Bouygues Telecom, Orange, Free-iliad Group and Altice France to buy SFR for €20.35 billion including debt.
- Consortium allowed an additional 48 hours to finalize agreements following recent negotiation progress.
- Deal, if approved, would reduce France's mobile network operators from four to three and would be among the largest recent telecom transactions in Europe.