Three French telecommunications giants have submitted an enhanced joint proposal worth 20.35 billion euros ($24 billion) to acquire SFR, setting up a potential showdown with European Union competition authorities.
The consortium of Bouygues Telecom, Free (owned by Iliad), and Orange delivered their improved offer on Friday to purchase most of Altice France’s telecommunications assets. This represents a significant increase from their previous 17 billion euro proposal that Altice rejected in October.
EU competition watchdogs have historically maintained strict policies requiring four separate operators in each national market, pushing back against industry consolidation efforts aimed at competing with larger American and Asian telecommunications companies.
According to an Orange representative, each company’s acquisition of SFR assets will undergo individual antitrust examination. A European Commission representative confirmed they have not yet received official notification of the proposed transaction.
“If a transaction constitutes a merger and has an EU dimension, it is always up to the companies to notify it to the Commission,” the spokesperson added.
The potential acquisition of SFR, controlled by billionaire Patrick Drahi, could dramatically reshape France’s highly competitive telecommunications sector. French carriers have engaged in prolonged pricing battles for years, creating pressure on profit margins and revenue expansion.
EU antitrust officials have historically implemented strict conditions and complete prohibitions on telecommunications mergers attempting to reduce mobile network operators from four to three within individual country markets, prioritizing competition protection and preventing price increases.
However, a 2024 EU competitiveness assessment recommended regulators reconsider their approach, which has created a fragmented industry, and instead focus on helping companies achieve greater scale to compete internationally with American and Chinese competitors.
Industry executives have similarly advocated for the EU to support mergers by evaluating deals across regional rather than national boundaries and considering investment commitments.
Should the Altice France asset acquisition proceed, it would likely undergo European Commission review, which allows 25 working days for initial assessment after filing. The Commission may extend this period by 35 working days to evaluate proposed remedies or address member state requests to handle the case.
While most mergers receive approval, the Commission occasionally initiates comprehensive second-phase investigations lasting up to 90 additional working days, potentially extending to 105 days.
The French government will hold significant influence in any deal discussions, as it represents Orange’s largest shareholder. Through its board position, the government can impact negotiations, particularly regarding employment protection and national interests.
Finance Minister Roland Lescure has indicated he will remain “extremely vigilant,” especially concerning pricing and service quality standards.
France currently operates with four telecommunications providers, with Orange holding market leadership. This structure would limit Orange to acquiring only the smallest portion of SFR, which serves 19 million mobile customers and over 6 million fiber subscribers.
The French telecommunications landscape has experienced numerous changes, including France Telecom’s acquisition of Orange in 2000. In 2014, Vivendi sold SFR to Drahi’s Numericable for 13.4 billion euros in cash plus a 20% ownership stake, creating Altice France.
Altice completed debt restructuring last year, resulting in Drahi maintaining 55% control of Altice France while creditors hold 45%. Bouygues Telecom, seeking the largest share of Altice’s operations, has grown through acquiring La Poste Telecom, adding 2.3 million customers in 2024.
Iliad launched in the French market in 2012 with its budget Free brand, triggering intense price competition. The three carriers have proposed acquiring most SFR operations, excluding fiber asset stakes and holdings in French overseas territories.
