French billionaire Patrick Drahi has reportedly agreed a deal to pay €4 billion ($4.5 billion) carving up Bouygues SA's telecommunications unit. The move is expected to reshape the landscape of French telecoms. The potential investment positions Mr. Drahi to play a leading role in a deal which will trim down the number of mobile operators in France from four to three.
Orange SA, the former French telecom monopoly, will buy Bouygues Telecom for €10 billion in shares and cash. After acquisition, Orange will sell a large part of Bouygues Telecom's fixed-line and mobile customers to SFR. Another successor, according to the framework, is the second biggest mobile operator in France, a subsidiary of Drahi's holding company, Altice NV, reports The Wall Street Journal citing some unnamed people familiar with the matter as the source.
Illiad SA, the group controlled by the entrepreneur will pay around €2 billion to purchase Bouygues Telecom's antennas and frequencies. Under the deal, the group will also own the entire network of Bouygues Telecom's wholly-owned bricks-and-mortar shops, according to a report published in the Financial Times.
Martin Bouygues, chief executive of construction-to-media giant Bouygues, has formally denied a €10 billion offer from Drahi. Shielding his staff from Mr. Drahi's cutting knife has been cited as the reason for his denial.
But now, Orange is possibly selling most of Bouygues Telecom's operations to Drahi and Iliad to clear antitrust hurdles. However, the deal may still get unraveled or the terms may be changed, cites Nasdaq quoting persons familiar with the matter. The French billionaire is probably making a splash in the U.S. with his purchase of cable operator Suddenlink and pending acquisition of Cablevision Systems Corp. Altice has also been reported trying to soften the image of Drahi as a cost cutter focusing on the billionaire's investment in networks and exclusive media content. Bouygues has hinted in February that negotiations won't extend the end of March while trying to minimize disruption of his staff and the market. Stéphane Richard, the Orange CEO, has announced on Wednesday about reaching a deal with SFR and Iliad on an outline for the carve-up. The consolidation has been clamored by the French telecom executives since the entry of Iliad into the wireless market in 2012 fueling a price war. Bouygues Telecom, the smallest of the three incumbent operators has been so hard hit that analysts doubt over its ability to match the investment level of competitors.
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