Explainer-French trio's planned $24 billion telecoms deal to test EU resolve
Overview of the French Telecoms Deal and Its Implications
By Gianluca Lo Nostro and Elvira Pollina
June 8 (Reuters) - A sweetened €20.45 billion ($23.54 billion) joint deal by Bouygues Telecom, Iliad-owned Free and Orange for France's second-largest telecoms operator SFR looks set to test the European Union's regulatory resolve.
The three companies said on Saturday they had agreed with Altice France to buy SFR, after their earlier €17 billion offer was rejected in October.
What Is at Stake?
A successful deal for SFR, which is backed by billionaire Patrick Drahi, would shake up one of the most competitive telecoms markets in Europe. Operators in France have been locked in price wars for years, pressuring margins and revenue growth.
EU antitrust regulators, however, have imposed tough remedies and outright blocks on telecoms deals if the deals reduce the number of mobile network operators from four to three in a single country.
Regulators want to safeguard competition and avoid price increases. But a 2024 EU report on the bloc's competitiveness urged regulators to ease a stance that had resulted in a highly fragmented sector, and instead focus on helping businesses gain scale and compete with U.S. and Chinese rivals.
The European Commission has been looking to pan-European deal approvals to help boost scale, Reuters has reported.
Who Would Review an SFR Deal?
Antitrust Notification Process
Each suitor must file its own separate antitrust notification with the authority that has jurisdiction over it.
Orange and Bouygues will file in France, as they generate more than two-thirds of their EU-wide turnover in France, exempting them from mandatory notification to the European Commission under EU merger rules.
Iliad, on the other hand, does not meet that threshold and will file in Brussels with the European Commission. Both regulators will then agree who will lead the merger review.
Timeline for Review
The European Commission has 25 working days after a deal is filed for a first-stage review. It may extend by 35 working days, to consider either proposed remedies or a member state's request to handle the case.
Most mergers win approval, but occasionally the Commission opens a detailed second-stage investigation for up to 90 additional working
