French media group Vivendi has announced that it has closed the sale of its mobile subsidiary SFR to domestic cable company Numericable for EUR13.366 billion (USD16.7 billion). Under the deal, Vivendi will retain a 20% stake in the newly merged business entity, which it can sell at a later stage, following the expiration of a one year lock-up period. Meanwhile, EUR200 million of the sale proceeds will be contributed towards Numericable’s purchase of mobile virtual network operator (MVNO) Virgin Mobile France.
Meanwhile, French competition authority, the Autorite de la Concurrence, has approved Numericable’s acquisition of Virgin from its parent Omea Telecom. The regulator noted that the takeover could be interpreted as a threat to competition in the market for bundled services if Virgin Mobile customers were given preferential access to Numericable’s multi-play TV and broadband services. However, Numericable’s commitment to opening up its cable network, as part of the conditional approval of its acquisition of domestic telco SFR, will safeguard competition, the antitrust watchdog said.
As previously reported by TeleGeography’s CommsUpdate, on 5 April 2014 SFR’s parent Vivendi accepted a takeover offer for the company from Numericable. Altice Group would take a 60% controlling stake in the combined entity SFR-Numericable, which would be publicly listed in France with a free float of 20%, while Vivendi would retain a 20% share. A month later, the cableco entered into exclusive negotiations with Omea Telecom to buy Virgin Mobile France for an enterprise value of EUR325 million. Numericable stated that the acquisitions would help it accelerate its strategy of convergence between high speed fixed and mobile connections.
Going forward, the combined operator is planning to use the SFR moniker as its flagship brand, although it will continue to provide services under the six brands currently in its portfolio, Le Figaro reports. Eric Denoyer, the new CEO of Numericable-SFR, discussed the operator’s strategy an interview with the domestic newspaper, noting: ‘We want to become the leader in the provision of high speed fixed and mobile services, before Orange. We will accelerate [our]investments in fibre and continue to modernise the cable [infrastructure]. We want to quickly double our fibre coverage to twelve million homes passed by 2017 and 15 million by 2020. In [terms of] mobile telephony, 50% of the population can currently access our 4G network and we are targeting 70% before the end of 2015’.