Bouygues Telecom closes La Poste deal

The deal has been in the works for some time. Bouygue Telecom announced an exclusivity deal with La Poste and SFR, the virtual operator's parent companies, back in February with the aim of completing the €950 million acquisition before year-end.

It has done that, but there were hurdles to overcome on the way. While a competition investigation could have been an issue, La Poste Mobile being France's largest MVNO, it was actually a shareholder squabble between La Poste and SFR that caused Bouygues the biggest headache.

Officially, we're not privy to the details. Bouygues simply disclosed that it had been notified of differences between the two sellers with regard to the terms and conditions of the deal and that as such they would turn to the dispute resolution mechanisms written into their joint venture agreement. La Poste held a 51% stake in La Poste Mobile and SFR 49%, however the latter also had a right of first refusal over La Poste's shares and the right to veto any sale, putting it in a position to play hardball...to an extent.

SFR, owned by cash-strapped Altice, reportedly wanted more money for its stake in La Poste Mobile than the shareholder split suggested. The sale of the MVNO also means SFR losing a major wholesale client; La Poste Mobile will move from SFR's network to that of Bouygues Telecom once the current wholesale deal expires at end-2026. It was clearly seeking compensation for that loss, which, according to the French press, runs into tens of millions of euros.

Earlier this month Le Figaro reported that La Poste and SFR had hammered out their differences, citing an unnamed source as saying that terms of the deal were now "considerably improved" as far as SFR was concerned. The paper had previously noted that SFR was after at least €700 million from the transaction; it doesn't take a mathematician to point out that that is significantly more than half of the purchase price. The telco also wanted to rewrite its wholesale contract with La Poste Mobile, raising the cost of using its network by 50% over the two years remaining on it, the paper's sources said.

Naturally, none of this appears in Bouygues' official announcement of the completion of the deal. The telco didn't even confirm the overall purchase price, although there's no reason to believe it has altered.

"This strategic move with the La Poste group underlines our ambitions in the B2C market," said Benoît Torloting, CEO of Bouygues Telecom.

"It's a source of great pride to combine our two brands that enjoy the robust values of a strong local

presence, expertise and agility," he said.

The deal will bring Bouygues Telecom an additional 2.4 million customers and a new major MVNO on its network, as well as a revenue hike; La Poste Mobile's topline exceeded €300 million last year. And just as important is La Poste Mobile's broad distribution network, namely the 7,000 post offices branches that sell its services.

This is a good deal for Bouygues Telecom. It gives it a valuable boost in its quest to compete with French market leader Orange. It may also be positive for SFR, from a cash injection perspective, despite the loss of a big wholesale client. But at this stage, we can only guess.