France’s Numericable-SFR Ready to Acquire Bouygues Telecom for $11.4 Billion Cash


Patrick Drahi, owner of France’s second biggest telecoms player Numericable-SFR, has come forward to buy rival Bouygues Telecom, who holds the third position, for about $11.4 billion in cash.


The acquisition would reduce the four players to three players in the French mobile market at the time when the merit of the such merging are under hot debates in Europe. On Sunday, according to France’s Economy Minister Emmanuel Macron the current period was not the right time for the consolidation in this industry, which required investment now. Government will soon begin the auction for 4G mobile spectrum and is trying to attract operators and investors to invest in fibre broadband.

The deal is expected to close on Tuesday when the Bouygues’ board meet and if successful it would merge Bouygues Telecom with Drahi’s cable and wireless provider Numericable-SFR SAS, said the people close to the matter. Iliad SA, a smaller carrier controlled by Xavier Niel, has agreed to take over some network assets and airwaves to lessen regulatory concerns, said the people.

The talks on the acquisition was on for months but the negotiations accelerated in the last two weeks. Drahi who won the bid for SFR last year against Bouygues, is working on to close the deal quickly as he is worried that the interest rate may shoot up and the instability in the Greek markets may make it more difficult to finance a bid.

Bouygues Telecom currently has more than 11 million mobile clients and now with it merging would Numericable-SFR would create a company with more than 30 million mobile subscribers and generate a revenue of more than $17 billion, shows the data. With the massive benefits possible (increased revenue and increased savings) by combining the companies, Drahi is offering a massive amount which is higher than in a round of sales talks last year. According to the analysts the valuation of the Bouygues Telecom come around $7 billion.

Drahi is working on all possible ways to close the deal before the rates increase, making Altice’s approach of highly leveraged deals more costly, said one source. Altice has acquired US cable company Suddenlink, Portugal Telecom and SFR in the last 18 months.

It is still not confirmed whether Martin Bouyhues, the owner of the Bouygues Telecom has agreed to accept the offer and sell the company. However, some sources suggest that he is trying to hike the price closer to $13 billion.

However, Drahi is already ready with the cash for the bid. The company has secured financing with a loan from BNP Paribas SA and JPMorgan Chase & Co., said the people close to the matter.

Numericable-SFR and Bouygues Telecom declined to comment on the matter.