30 billion euros: this is the sum that Patrick Drahi could pocket if he decided to go through with his plan to sell SFR. The boss of Altice, the parent company of the red square operator, is in dire need of fresh cash to repay its monumental debt—€60 billion, including €24 billion in France.
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Fewer players, less competition
The group, which was built through a series of acquisitions financed by easy credit (which is no longer the case today), has begun to sell off its family jewels in recent years. SFR could well be one of them, which is whetting the appetite of French rivals. The possibility of selling the company had already been raised in early April, and now it's back in force, this time via Bloomberg.
Bouygues Telecom, Iliad (Free), and Orange are reportedly in the running, as are the Emirati group E&, as well as investment funds. Altice has reportedly sent information to all these fine people in recent weeks; suitors are reportedly only interested in a specific SFR business, and given the sums involved, some are considering teaming up to cover the costs of dismantling it.
This means that if a French operator were to acquire SFR, it wouldn't win the whole lot. In a market where each player holds a roughly equal share of around 20% (only Orange is ahead), buying a competitor would mean completely crushing the landscape. French and European regulators will probably not view such a transaction favorably; on the other hand, selling SFR by apartment would make sense.
From the consumer side, obviously such consolidation would not be very good news: fewer players in a market generally means higher prices. The arrival of Iliad (Free) in 2012 completely dynamited the sector, making France one of the most competitive markets in the world.
Source: Bloomberg
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