Telenet has agreed to buy SFR Belgium and Luxembourg from Altice for EUR 400 million. This extends Telenet's footprint into parts of Wallonia and Luxembourg and increases its presence to around two-thirds of the Brussels region. SFR counts around 90,000 customers in Belgium and 15,000 customers in Luxembourg and is already a MVNO on the Base network owned by Telenet.
The acquisition values SFR BeLux at 6.5 times estimated adjusted EBITDA for 2016, including expected annual synergies of EUR 16 million by 2021 from the integration with Telenet. The proposed synergies are mainly driven by the extended footprint in Brussels, where Telenet will become the biggest cable operator; the introduction of new quad-play offers and B2B services; and overall cost synergies.
Telenet intends to finance the acquisition through a combination of existing cash and its revolving credit facilities. It also plans to invest EUR 12 million in 2017-18 in improving SFR's systems and network and expects about EUR 4 million in restructuring costs from the acquisition.
The deal remains subject to clearance by regulatory authorities. Other candidates to acquire SFR BeLux included Orange and private equity funds. Altice is reportedly selling the activities in order to concentrate more on its core markets of France and the US.
