Vivendi approves SFR sale to Altice for $23 B

Bloomberg reports that billionaire Patrick Drahi's Altice SA has won the bidding war for Vivendi SA's SFR phone businesses, beating Bouygues SA's government-backed offer, among others. The dea is reportedly worth over 17 billion euros or $23 billion. Altice is expected to shell out 13.5 billion euros in cash and will part with 20% of a merged Numericable Group and SFR company to Vivendi, the agreeing companies have said in their separate statements. Moreover, the two also confirmed that Vivendi will stand to receive an extra 750 million euros should it meet earnings targets as dictated in the sale agreement.

Because of the sale, Bloomberg said that Numericable's wireless services will now be able to challenge Orange SA, the current bundled mobile, landline, TV and Internet packages market leader in Europe, and the phone unit of Bouygues's. Moreover, Vivendi's choice to stick with its preferred bidder following three weeks of exclusive discussions had ended a bidding war that has threatened the reorganization progress of the Paris-based company in order to focus its business goal on media.

Analyst Ian Whittaker at Liberum Capital Ltd in London said about the merger, "It changes the dynamics a bit -- you've now got four credible quad-play offers in the market. From a Vivendi standpoint -- they are now getting out of SFR which is a plus."

On the other hand, Bloomberg said that an extended antitrust review on the game-changing deal between Altice and Vivendi might not happen as the agreement involved a merger of landline with wireless assets, according to people familiar with the matter. Moreover, Bloomberg said that the consolidation will also retain the number of mobile-network operators in France to four.

Part of Vivendi's statement read, "(A deal with Altice offers the) highest growth potential, generating the highest value for its customers, employees and shareholders, while best meeting Vivendi's objectives."

Drahi, on the other hand, seemed pleased about the merger in a separate statement, which read, "(Altice has taken on) formal engagements to guarantee employment in the framework of this merger," Drahi said in a statement. "This project will generate strong growth, which will create jobs and investment."

Tags

Altice SA, Vivendi SA, Patrick Drahi

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