A three‑way offer to carve up most of Patrick Drahi’s SFR would redraw France’s mobile map from four networks to three, but regulatory and political scrutiny loom large after an initial rejection

PARIS — In a dramatic move that could reshape France’s telecoms market, Orange, Bouygues Telecom and Free (Iliad Group) have jointly submitted a non‑binding €17 billion offer to acquire most of Altice France’s telecom assets built around SFR. The proposal, unveiled on October 14–15, 2025, would split consumer, business and infrastructure activities among the three rivals and, in effect, compress the market from four network operators to three.

Within hours, however, billionaire owner Patrick Drahi rebuffed the approach. An internal memo from Altice France chief executive Arthur Dreyfuss informed staff that the bid had been immediately rejected, according to people familiar with the message. The pushback doesn’t end the story: advisers and investors still expect a protracted dance over price, perimeter and remedies.

The offer values the targeted assets at €17 billion and implies a whole‑of‑Altice France enterprise value north of €21 billion, according to statements from the bidding trio. Under their outline split, Bouygues would take the largest slice of SFR’s assets (around 43%), with Free/Iliad on roughly 30% and Orange near 27%. Business‑to‑business activities would tilt towards Bouygues and Free, while consumer and infrastructure pieces would be shared. Some units — including call‑centre group Intelcia, edge‑computing venture UltraEdge, wholesale fibre vehicle XpFibre, Altice Technical Services and certain overseas holdings — were carved out of the proposal.

For Altice, timing has become pivotal. In early October the group closed a sweeping, court‑supervised restructuring of roughly €24 billion in obligations at its French arm, extending maturities to 2028–2033 and reducing annual interest costs. The workout lowered leverage but left SFR under pressure to refocus and invest, even as competition and capital costs squeeze cash flows. A sale — in whole or in parts — has long been seen as Drahi’s cleanest path to crystallise value and simplify the portfolio.

Politically, the move ricocheted quickly. Finance Minister Roland Lescure said the government would be “extremely vigilant,” flagging that any transaction must protect consumers on prices and quality. Shares in Bouygues and Orange nonetheless jumped on the consolidation prospect, a sign that markets believe industrial logic and regulatory winds are more favourable than in the past.

Why a three‑into‑four market again?
France’s four‑player mobile structure has delivered some of Europe’s lowest tariffs — a boon for households but a headache for returns. Executives argue that a thinner field would unlock network investment as 5G densification, fibre upgrades and edge‑cloud services demand heavier capex. The carve‑up concept also sidesteps the clean “4‑to‑3” merger optics that often trigger the EU’s toughest scrutiny, by distributing assets and customers rather than combining two national networks outright.

Europe’s precedent book has shifted. In February 2024 Brussels cleared the Orange–MásMóvil joint venture in Spain — effectively a 4‑to‑3 outcome — but imposed robust remedies, including spectrum divestments to bolster a replacement fourth operator. Regulators have also signalled a greater willingness to consider consolidation where it demonstrably supports investment and competition over the long term. That doesn’t mean an easy path in France: the national competition authority, sector regulator Arcep, and the European Commission would all have a say, and the politics of consumer pricing are particularly charged in a cost‑of‑living era.

What the bidders want — and what they fear
For Orange, the smallest of the three slices would still tidy up a long‑running strategic question: whether to play offence at home after years of bruising price wars. Bouygues, often praised for operational discipline, would gain scale in both consumer and enterprise, and could tighten its already strong network sharing in less‑dense areas. Free/Iliad would extend a decade‑long disruptor story into a more capital‑efficient future, bolting on customers and infrastructure while keeping its low‑cost DNA.

The bidders’ nightmare scenario is regulatory over‑engineering: forced divestments, wholesale obligations, spectrum set‑asides and MVNO mandates that erode synergies or shift value to a new entrant. Even with concessions, closing could take years. Executives are already talking in multi‑year timelines for due diligence, definitive agreements and remedy execution.

The assets at stake — and what’s excluded
SFR is France’s No. 2 by mobile customers, with a meaningful fibre footprint and fixed–mobile convergence base. The joint offer leaves out several Altice businesses that complicate antitrust analysis — call centres, construction and non‑core infrastructure — to sharpen the case that the deal is about rationalising networks and retail competition, not building a sprawling conglomerate.

The regulatory gauntlet
Any route to approval runs through Brussels and Paris. Expect a full‑phase EU probe testing whether a de facto triopoly would raise prices or dull innovation, and whether remedies could replicate the lost constraint of a fourth facilities‑based player. In Spain, approval hinged on creating a credible challenger via spectrum transfers and access obligations. France could see similar remedies, perhaps paired with rural coverage guarantees, price‑cap undertakings on entry‑level plans or tightened wholesale access for MVNOs.

Arcep will zero in on spectrum concentration, network sharing and quality‑of‑service targets, while France’s competition watchdog will model price effects and switching behaviour. The political calendar matters too: a drawn‑out review stretching into 2026 would test patience and potentially reopen the deal’s economics if capital markets turn.

What next?
Drahi’s “non, merci” may be a first move in valuation chess rather than a full stop. Having restructured the balance sheet, Altice France can afford to play for time while bidders sharpen pencils or re‑cut the perimeter. Private‑equity and infrastructure funds that circled Altice assets in the past could also re‑emerge as co‑investors in towers, fibre or data‑centre adjacencies, easing regulatory choke points.

Investors should watch for three signals: (1) whether the trio convert their proposal into an exclusive negotiation with tighter remedy packages; (2) whether policymakers telegraph red‑lines on prices and rural coverage that bound deal economics; and (3) whether Altice initiates alternative transactions — partial sales or strategic partnerships — to keep optionality and bidding tension alive.

For now, the bid is a shot across the bow that has already reset expectations: consolidation in Europe’s telecoms is back on the table, but only on terms that satisfy regulators, politicians and, ultimately, customers. In France, that negotiation has just begun.

ANALYSIS — Pricing, Investment and the Consumer Trade‑Off

Supporters of consolidation point to Spain, where Orange and MásMóvil combined in 2024 under strict remedies that aimed to preserve a four‑player outcome. Advocates say France could follow a similar template: bolster a replacement challenger with spectrum and wholesale access while letting the largest players pool assets and reduce duplicated capex. The counter‑argument is familiar: fewer facilities‑based operators can blunt competitive intensity, especially on entry‑level plans, and may slow innovation if remedies under‑deliver.

For the bidders, the spreadsheet logic is compelling. France’s operators face rising 5G and fibre investment needs and energy costs, while monthly ARPUs remain among Europe’s lowest. Cutting parallel networks and retail overheads offers a rare path to higher returns. For regulators, the question is whether promised efficiencies reach consumers as better coverage and quality, not just fatter margins.

Bottom line: an agreement here would be a landmark in Europe’s new consolidation cycle — but only if the politics line up with the economics.