SFR fields merger bids from Bouygues, Altice

French conglomerate Vivendi was on Thursday fielding two competing bids for France’s second largest mobile operator, SFR. Both Bouygues Telecom and French cable operator Altice submitted merger offers.

Bouygues has offered €10.5bn in cash and 46 per cent of the new entity, to create a market leading mobile network and a strong second fixed network. A merger between Bouygues and SFR would also realise synergies estimated at €10bn, the company said.

Altice’s bid is understood to be higher but the company has not made details public.

Bouyges and SFR agreed to roll out a shared network covering 57 per cent of the French population earlier this year, creating a joint venture to manage the shared base station assets and a RAN share covering 2G, 3G and LTE services in the area covered by the network.

The network covers all of France but excludes the country’s 32 largest urban areas that have more than 200,000 inhabitants and blind spots that are currently not covered by either operator. The two said that the agreement will enable them to improve their mobile coverage and generate savings.

Under the terms of the deal, each operator will continue to conduct its network research and development activity separately and will independently set prices and conduct commercial deals. They will also be able to continue offering distinctive services as they will have control over their network backbone and frequencies, the two added.

But French regulator Arcep said it would work closely with the nation’s Competition Authority to ensure both operators remain independent in their business strategies and sales and that the agreement “will not squeeze certain competitors out of the market”. The regulator will also ensure the agreement results in better coverage and quality of service to end users before approving the deal.

So it remains to be seen how Arcep reacts to new of the proposed mergers.

“The similarity between the business cultures of both companies and the trusting relationship built up between the senior management teams during the shared mobile network agreement negotiations guarantees the success of the merger and the smooth generation of the identified synergies,” Bouygues said in a statement.