Bouygues, Orange, Free agree €20B SFR carve up

French operators Bouygues Telecom, Free-Iliad Group and Orange reached a deal with Altice France to acquire SFR for a total enterprise value of €20.4 billion, sparking a major shake-up of the country’s telecoms sector.

The three would-be acquirers signed a memorandum of understanding with Altice France less than two months after entering into exclusive talks. An initial offer of €17 billion was rejected in October 2025.

Terms of the proposed deal remained unchanged from what was laid out in April, with Bouygues taking a 42% stake, Free-Iliad 31% and Orange 27%.

SFR’s consumer mobile and broadband units will be carved up between the consortium, with Bouygues to take control of the B2B segment.

With the deal expected to be subject to intense national and European regulation, breakup fees of between €100 million and €2 billion have been agreed, depending on the reason for any collapse and timing of termination of the deal.

Regulatory scrutiny is likely to be fierce because the transaction will reduce the number of players in the market from four to three, though there are signs traditional European regulatory resistance to deals which do so are beginning to lessen and the European Commission indicated an easing of corporate merger rules earlier this year.

The companies stated the proposed transaction would create value for all stakeholders, and ensure continued development of France’s infrastructure and digital ecosystem.

Combining SFR’s assets “is expected to generate significant synergies”, benefitting consumers and the overall digital ecosystem by bolstering the capacity to invest.

A consultation period will now be opened with relevant employee representative bodies. Definitive legal documents are expected to be signed in the second half of 2026 with completion expected in the second half of 2027, following regulatory clearance.

Big challenge
Kester Mann, director of consumer and connectivity at CCS Insight, believes the deal paves the way for the greatest shake-up in the French telecoms sector since the arrival of Iliad in 2012.

“The agreement appears a successful outcome for all parties. Bouygues, Orange and Iliad each gain important new assets in their pursuit for greater scale, while eliminating a major rival will reduce the competitive intensity of the market.”

He warned the biggest challenge would be to convince competition authorities the deal is positive for the French market.

“Several years ago, this would have felt like a herculean task. But the regulatory tide has steadily been turning favour of consolidation in Europe following recent deals approved in the UK and Spain. Although a lengthy probe is likely, it is surely odds-on to get the green light,” he added.