Altice’s French subsidiary SFR buys Covage for €1 billion

11 December 2019 3 min. read

Covage, France's fourth largest fibre wholesale operator, has been acquired by SFR FTTH, the French fibre subsidiary of Altice for a total cash consideration of €1 billion, in what is one of the largest French telecom deals in the past decade.

“We are extremely proud to integrate Covage, a great company, with a portfolio of areas in France complementary to ours,” said Patrick Drahi, founder of Altice, the parent of SFR FTTH, on the deal.

With more than 5.4 million secured homes (including 1.7 million homes built, SFR FTTH is France’s largest fibre-to-the-home (FTTH) player. The company is owned by Altice and a group of three private equity investors, (Allianz Capital Partners, AXA Investment Managers and Omers Infrastructure), who purchased a 49% stake in SFR FTTH for €1.8 billion at the end of 2018.

The bolt-on of SFR FTTH adds a network of 2.4 million homes to be passed (including 0.8 million homes already built) to its footprint, consolidating its position as France’s market leader. According to Paolo Pescatore, a telecom analyst at PP Foresight, the joining of forces significantly strengthens Altice’s position in the French market at a time of “growing importance of convergence”.SFR buys counterpart Covage for €1 billionFaced with the rise in substitutes for traditional telecom services and the emergence of bigtechs, telecom companies are rethinking their business models. One strategy is gaining market leadership in the infrastructure segment, and then commercialising their assets while converging towards adjacent segments including 5G and data monetisation. 


The deal, which is expected to close in the first half of 2020, sees Cube Infrastructure Fund and Partners Group exit their equal stake in Covage. Emerton, a high-end strategic consulting firm with three offices globally, served as sole strategic sell-side advisor to the pair of investment groups, supporting with vendor due diligence services.

Legal consultancy to the sellers was provided by DLA Piper, comprising a team of among others partners Simon Charbit, Matthieu Lampel, Eric Villateau, Edouard Sarrazin, Pascal Martin and Jerome Halphen. 

Meanwhile, at the other side of the table, SFR FTTH and its shareholders were advised on legally by Mayer Brown and Freshfields Bruckhaus Deringer, two law firms with a global presence. Other M&A consultants and advisors to the deal were at the time of writing not known.

Listed on Euronext Amsterdam, Altice is with over 30 million customers one of the world’s largest providers of fibre networks and mobile broadband services. The company also has activities in content, media, entertainment and advertising.

In parallel to this acquisition, Altice is in the process of selling a stake in its FTTH business in Portugal (3.8 million homes passed), as the stock listed company seeks to reduce its massive €31 billion debt burden.