Altice spends €400 million-plus on French telco

Altice France has brokered a deal to acquire Coriolis Telecom, a moderately-sized French telco, for a sum that could go north of €400 million.

The operator, parent company of SFR, has entered into an exclusivity agreement to acquire the entirety of Coriolis Telecom for an initial consideration of €298 million, plus a deferred payment of €117 million; that’s a total spend of €415 million.

In return, it will get half a million MVNO customers – SFR is already one of Coriolis’ host networks – located in small and mid-sized French cities, customers at 30,000 businesses; and Coriolis’ CRM division, which serves internal and third-party customers via four call centres in France and overseas.

“Coriolis is a great, fast growing, company with a customer proposition that would be highly complementary to SFR,” said Grégory Rabuel, Chairman and CEO of Altice France. We’ll have to take his word for it on that first point, since Coriolis does not share financials.

“We look forward to bringing onboard the significant experience and expertise of the entire team of Coriolis to Altice France and working together to further improve our customer proposition and to realize in full the excellent growth prospects of Coriolis,” Rabuel said.

That entire team appears to include Pierre Bontemps, who founded Coriolis in 1989, albeit as Vodafone; the firm took on its current name a decade later. Rabuel noted that Bontemps will “continue this impressive and entrepreneurial adventure together with us,” although he did not specify in exactly what context.

Coriolis might not be a huge player, relatively speaking, in the context of the global telecommunications industry, but this is quite a big deal.

Firstly, it sees Altice snap up a player that was once widely tipped to become one of the big guns in France. Short-lived merger talks between Orange and Bouygues Telecom just over five years ago led to much speculation in France about assets that might need to be hived off should a deal emerge, and which company would be in a position to buy those assets and effectively set itself up as the new number four in the market. Coriolis Telecom’s name was often mentioned.

Half a decade later, talk of large-scale M&A in France has died down, in no small part due to Bouygues Telecom performing better than many thought it would, but deals still come at the smaller end of the market.

And that’s the second reason why this is a deal worth noting. Small and medium-sized operators are gradually being swallowed up by the bigger players, leaving very little in the way of credible competition.

For example, Altice announced the acquisition of RegloMobile’s parent company earlier this year, a deal that will give it a 50% stake in the MVNO. Meanwhile, at the end of last year Bouygues Telecom closed the acquisition of Euro-Information Telecom (EIT), an alternative operator with broadband and TV operations as well 2 million MVNO customers spread across a number of brands.

The EIT deal passed regulatory scrutiny, thus it seems safe to suggest that the Coriolis deal will too, the acquisition target being much smaller. But there’s always the chance French regulators will start to look closer at some of these transactions.

Nonetheless, Altice and Coriolis said that, subject to receiving all the required approvals, they expect the deal to close in the first half of next year.