Altice to split into separate US and European companies
Altice owner Patrick Drahi has reversed several years of transatlantic takeovers by deciding to separate out the US operation into a new company.
Group shareholders will be given shares in the new Altice USA, which includes cable operators Suddenlink and Cablevision. Altice bought control of Suddenlink in 2015 for $9.1 billion and Cablevision – which uses the Optimum brand – in 2016 for $17.7 billion.
Drahi will continue to be the biggest shareholder in both Altice USA and Altice Europe, which includes French mobile operator SFR as well as PT Telecom, the former Portugal Telecom. Altice bought control of SFR from Vivendi in 2014 for €17 billion and later acquired the rest of the company in stages. Drahi has 52.5% of both operations.
Drahi said last night: “The separation will allow both Altice Europe and Altice USA to focus on their respective operations and execute against their strategies, deliver value for shareholders, and realise their full potential. Both operations will have the fundamental Altice Model at their heart through my close personal involvement as well as that of the historic founding team.”
Drahi said he will serve as president of the board of Altice Europe and chairman of the board of Altice USA.
Dennis Okhuijsen will serve as CEO and a director of Altice Europe with all corporate functions and country managers reporting into him. Dexter Goei, who had been group CFO, will continue to serve as CEO and a director of Altice USA. Both will report to Patrick Drahi. Michel Combes, CEO of Altice group until November 2017, has just been appointed CFO of Sprint.
Altice Europe will reorganise its structure comprising Altice France (including French overseas territories), Altice International and a newly formed Altice Pay TV subsidiary. This will include integrating Altice’s support services businesses into their respective markets and bundling Altice Europe’s premium content activities into one separately funded operating unit.
Altice group’s ownership of Altice Technical Services US will be transferred to Altice USA prior to completion of the separation for a nominal consideration.
“At the core of our strategy is the operational and financial turnaround in France and Portugal,” said Drahi, hinting at some future sell-offs: “In parallel, we have a clear plan to further strengthen our long-term balance sheet position as we execute our non-core asset disposals,” he said.
In the US, he said, “we have a full operational agenda to deliver best-in-class services to our customers, drive innovation and advance our fibre investment strategy. The new organisation structure will enable us to focus even more on executing this agenda while enhancing transparency for our investors.”