Altice on Monday made an offer to acquire rival French telco Bouygues Telecom.
The merger would put incumbent Orange under serious pressure in both the fixed and mobile markets and attract intense scrutiny from antitrust watchdogs. In anticipation of such close attention, Iliad, parent of Free Mobile, announce d it is in talks to acquire unspecified assets from Altice.
Neither Altice nor Bouygues disclosed the value of the proposed transaction, but sources cited by the Wall Street Journal said Altice has offered €10 billion.
In a brief statement, Bouygues confirmed it has received an unsolicited offer from Altice, but said no negotiations are in progress.
"Bouygues’ board of directors will meet on Tuesday 23 June 2015 to review Altice’s letter," the conglomerate said.
An acquisition of Bouygues Telecom by Altice, parent of bundled services provider Numericable SFR, would create an even more powerful competitor in the French telco market.
Based on first quarter figures, a combined Numericable SFR/Bouygues would have 27.1 million mobile customers, putting it within touching distance of Orange, which has 27.3 million. On the fixed side, the merged entity would boast 9 million subscribers, narrowing the gap to Orange’s 10.4 million.
The reduction in integrated service providers to three from four would be subject to close scrutiny by competition authorities, and remedies such as mandated wholesale access and, in all likelihood, divestments would be applied.
In anticipation of this, Free Mobile parent Iliad said in a statement that it has entered exclusive talks with Numericable SFR "with a view to purchasing a portfolio of assets in connection with the offer submitted by Altice for the acquisition of Bouygues Telecom."
Rumours of a move for Bouygues ramped up in February, and if a deal goes ahead, it would be the latest in a long line of acquisitions by Altice.
At the beginning of June, the Luxembourg-based cable conglomerate closed its acquisition of Portugal Telecom from Brazilian telco Oi. A month earlier, Altice marked its entry to the U.S. cable market with the US$9.1 billion purchase of regional provider Suddenlink.
These two transactions took place mere months after Altice completed its acquisition of French mobile operator SFR.
