Vivendi has confirmed that Bouygues Telecom and Altice, the owner of cable operator Numericable, have made binding offers for its French operator SFR. Numericable did not disclose financial details of the offers, but Bouygues said its offer values SFR at around EUR 14.5 billion.
Mindful of the French government's concerns about unemployment, Bouygues also said if its bid succeeds, there would be no forced redundancies. Bouygues bid includes EUR 10.5 billion cash and a 46 percent stake for Vivendi in the merged entity. The new company would be listed on the stock market after the merger, helping it raise cash for investments. This would also give Vivendi the option to sell another 15 percent stake. Bouygues would hold 49 percent in the new company and consolidate its results fully.
Bouygues expects EUR 10 billion of synergies from the merger of the two companies, which already have a mobile network-sharing agreement in place. Around 80 percent would come from cost savings and the remainder from capex savings. The company expects the integration would cost around EUR 800 million over five years, with 80 percent of the synergies realised within three years.
Altice did not disclose further details of its bid. Vivendi said its supervisory board will study the offers, but did not give a deadline for taking a decision. Vivendi previously considered listing SFR on the stock market before the takeover offers emerged.
While SFR's results have suffered from the price competition generated by Free's launch as the fourth mobile operator in France, a merger with Bouygues would vault the company to number one in the French market in terms of mobile customers. According to research by Telecompaper, SFR and Bouygues would have 47.5 percent of customers, based on the latest figures from Q3 2013, versus 41.6 percent for Orange and 10.9 percent for Free. Numericable already cooperates with SFR on its MVNO and is hoping a full merger would strengthen its position in the quad-play market and expansion in fibre broadband.
