Altice Europe to acquire Covage for $1.1bn

Altice Europe to acquire Covage for $1.1bn

Patrick Drahi Altice.jpg

Altice Europe’s SFR FTTH has entered into a exclusivity agreement with Cube Infrastructure Fund and Partners Group for the acquisition of Covage for €1 billion ($1.1 billion).

With connectivity to more than 2.4 million homes, Covage is the 4th largest wholesale fibre operator in France. This 2.4 connected homes will be will added to SFR FTTH’s existing footprint of more than 5.4 million homes. Through this acquisition SFR FTTH plans to execute on its strategy to significantly expand its footprint with more homes to be awarded as well as opportunities for consolidation.

“I am very pleased that we are further expanding the leading FTTH wholesaler in Europe,” said Patrick Drahi (pictured), founder of Altice. “We are extremely proud to integrate Covage, a great company, with a portfolio of areas in France complementary to ours. With this transaction we also bring onboard excellent local relationships. We continue to be focused on deleveraging Altice Europe notably thanks to growing revenues and EBITDA which will be supplemented with disposal proceeds. As I have explained previously, we are in advanced discussions with several parties in relation to our Portuguese fibre asset. This process is supported by the significant appetite for fibre in Europe clearly demonstrated by the present transaction which has been strongly supported by our financial partners in SFR FTTH.”

Due to complete in H1 2020, the deal is set to enable SFR FTTH and Covage deploy fibre over the next 4 years in areas that don’t have existing fibre infrastructure.

Speaking to Capacity, Paolo Pescatore, tech, media & telco analyst at PP Foresight, commented: "There’s a fibre frenzy going on everywhere. Despite the buzz around 5G, owning and deploying fibre is more important as underlined by this deal. A combination of fibre and 5G will represent key assets for converged telcos to generate greater value from users and businesses.Overall, this will strengthen Altice’s position in the French market given the growing importance of convergence. However, it’s debt is an ongoing concern and something that it must address."

This summer, Altice Europe confirmed the planned sale of a stake in its fibre network in Portugal. The deal came in light of the company’s €31 billion debt. Drahi indicated that talks were not urgent, because the Portuguese business – formerly Telecom Portugal – has improved. Altice owns 100% of the fibre-to-the-home (FTTH) network in Portugal, with 3.8 million homes passed.

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