The European Commission (EC) has approved the proposed acquisition of French wholesale fibre operator Covage by SFR FTTH, a company jointly controlled by Altice, Allianz and OMERS. The approval is conditional on full compliance with a commitments package offered by Altice, Allianz and OMERS.
In November 2019 SFR FTTH, backed by a consortium of financial investors led by OMERS and including Allianz Capital Partners and AXA Investment Managers – Real Assets, entered into an exclusivity agreement with Covage’s current owners Cube Infrastructure Fund and Partners Group regarding the acquisition of 100% of Covage for a total cash consideration of EUR1.0 billion (USD1.2 billion), with the transaction expected to close by end-2020.
In approving the deal, which was notified to the EC on 8 October 2020, the Commission noted: ‘Covage is the leading independent provider of wholesale access to fibre capacity in France. Particularly in low population density areas, where internet access is more difficult to obtain. It is important for local authorities to have alternative suppliers for the construction and management of high-quality fibre-to-the-office [FTTO] networks. Covage directly competes with the Altice-owned company SFR on these markets, so we approved the acquisition of Covage thanks to comprehensive divestments to ensure that competition will remain to the benefit of local and international customers and consumers in France.’
To address the EC’s competition concerns, SFR FTTH offered the following commitments:
(i) The divestment to a suitable buyer of 25 subsidiaries and of assets corresponding to Covage’s local fibre loop business on the territory of 30 public institutions. These subsidiaries and assets consist of FTTO networks (including several mixed FTTO and fibre-to-the-home networks) and represent altogether approximately 95% of Covage’s FTTO business.
(ii) The offer of a transitional service agreement, including access to all assets and services required to operate the divested business competitively for a duration enabling SFR FTTH to become fully independent.