Altice/Numericable see €1B in savings from SFR deal

As the market continues to digest the news that Vivendi has snubbed Martin Bouygues and a French minister to hold exclusive talks on the sale of SFR with Altice and Numericable, further details have emerged about the Altice plans, including the fact that Numericable expects to achieve more than €1 billion ($1.39 billion) in savings through the deal.

According to Reuters, the savings will be partly achieved through a rationalisation of the network operations of SFR and Numericable, such as by migrating SFR's broadband customers to the cable operator.

Furthermore, banking sources told Reuters on Friday that the Altice/Numericable deal would be backed by around €13.5 billion euro-equivalent of debt financing. Bank of America Merrill Lynch, Barclays, BNP Paribas, Credit Agricole, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan and Morgan Stanley have underwritten the debt financing, it was reported.

It was revealed on Friday that Vivendi had decided to enter into a three-week period of exclusive negotiations with Altice, the company founded by Patrick Drahi, on the acquisition of SFR.

The media and telecoms group took this decision despite the fact that Industry Minister Arnaud Montebourg had expressed a preference for the Bouygues bid because he believed it would calm what he called "destructive competition" in France. He also expressed concerns that an Altice/Numericable acquisition would bring a high level of debt to the merged entity.

The Altice offer comprises an €11.75 billion payment to Vivendi and a 32 per cent share in the equity of the combined listed entity. It also provides Vivendi with pre-determined exit conditions. Bouygues is offering €11.3 billion and a 43 per cent in the merged company.

It was also reported by the French press over the weekend that junior minister Fleur Pellerin has called for Drahi to move back to France should the talks succeed. However, a report in Le Monde said the owner of Altice has no intention of moving from his Geneva home.

For more:
- see this Reuters article
- see this separate Reuters article
- see this Le Monde article (translated by Google Translate)

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