The carving up of SFR begins: its three competitors strike together with 17 billion on the table

On Monday, the three major French telecom operators submitted a joint offer to acquire most of the activities of Altice France, the parent company of SFR. Amount of the transaction: 17 billion euros for the targeted assets, i.e. an implicit valuation exceeding 21 billion for the entire group.

SFR sold piecemeal: Bouygues takes 43%, Free 30%, Orange picks up the crumbs

This non-binding proposal paves the way for a methodical dismantling of the last challenger in the sector. The timing is not trivial: at the beginning of October, Altice France restructured its debt by increasing it from 24.1 to 15.5 billion euros thanks to a cancellation of 8.6 billion. A maneuver which cleaned up the accounts and whetted appetites.

The targeted scope includes almost all of SFR, except for a few subsidiaries such as Intelcia, XP Fiber or overseas activities. But the most surprising thing is the distribution envisaged. Bouygues Telecom takes the lion’s share with 43% of the value, concentrating in particular professional activity and the mobile network in rural areas. Free-Groupe iliad takes 30%, while Orange, already the market leader, is content with 27%. The three entities share general public customers, infrastructure and valuable radio frequencies.

A transition under close surveillance

The promoters of the operation adorn their approach with industrial virtues: strengthening investments in very high-speed networks, cybersecurity, artificial intelligence. They also promise the preservation of a “competitive ecosystem for the benefit of consumers”. The formula risks arousing skepticism from regulatory authorities. How would three players absorbing the fourth maintain viable competition?

The imagined mechanism provides for a transitional phase via a joint company, which would rely on Altice’s current teams to manage the gradual migration of customers. This temporary entity would make it possible to avoid the service disruption feared by SFR’s 20 million subscribers. But before getting there, the journey will be strewn with pitfalls: in-depth due diligence, consultation of staff representatives, validation of financial hypotheses and above all, the green light from the competition authorities.

The press release also remains cautious, specifying that“there is no certainty at this stage that this indicative offer can lead to an agreement”. Patrick Drahi, owner of Altice, must first agree to open his books. But the pressure on him is intensifying: his creditors, who now hold 45% of the capital, have given him an ultimatum. If he does not sell SFR by the end of 2027, he could lose control of his empire. Between this constrained schedule and the expected verdict from the Competition Authority, which could refuse to see the French market go from four to three operators, history is being written under tension. Its outcome remains uncertain.

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