Altice could sell Portuguese operator Meo, Iliad in ambush

Estimated read time 3 min read

Altice could sell Portuguese operator Meo, Iliad in ambush

It is from Portugal that Altice’s worries have left, with the suspicions of fraud, corruption and money laundering weighing on his unofficial number two, Armando Pereira. It is Portugal that could deliver part of the solution by participating in the deleveraging effort (60 billion euros) of the telecom giant.

According to The Echoes, Patrick Drahi’s group has put its Portuguese assets up for sale. Namely Meo, the leading Portuguese operator, present on mobile and fixed telephony, internet access and pay television, and the fiber deployment company FastFiber. Unlike the complex file that SFR constitutes – minority stake, weight of debt – Altice Portugal would be the asset” the easiest to sell and understand ».

According to information from the economic newspaper, Lazard Bank has been mandated to evaluate the various strategic options. The sale of the entire perimeter would be preferred without ruling out the assumption of minority shareholdings.

A growth of 13 %

On June 2, 2015, Altice bought what was then Portugal Telecom from the Brazilian Oi, valuing the Portuguese incumbent operator 7.4 billion euros. The telecom group was then at the peak of its power in France after finalizing the takeover of SFR and offering Virgin Mobile.

Altice had already tried to sell Meo in 2021 to reduce the weight of its debt. More than two years later, caught by the throat and having to pledge to his creditors, Patrick Drahi does not intend, however, to sell off his activities in Portugal. According to The Echoes, he would expect at least 10 billion euros, or 3.5 times the operator’s turnover (2.8 billion euros).

The country’s leading operator, the former Portugal Telecom takes 48% of the mobile market share and 41% on the fixed line, ahead of Vodafone and NOS, respectively number two and three in the Lusitanian market. It is also showing good momentum with a growth of 13% in the first half of the year.

The bulk of the investments would, finally, be behind him. With a fiber coverage rate of 90.9%, Portugal is the European country with the most fiber after Latvia according to the FTTH Council Europe. Active players in the deployment of fiber, Meo and its subsidiary FastFiber are no strangers to this industrial success.

Iliad and Orange, potential buyers

Who to take over Meo? The name of Iliad spontaneously comes to mind. In strong growth, the group of Xavier Neil (Free) intends to play a consolidating role. During the presentation of the half–year results at the end of August, its managing director indicated to look at the acquisition opportunities in the three countries where it is present – France, Italy, Poland – or in any other European country. Objective: to enter the European top 3.

Also absent from Portugal, Orange is another serious contender. The Echoes recall that the incumbent operator has not signed any major acquisitions for years. On the other hand, the takeover of Meo by one of the two local players – Vodafone or NOS – is more uncertain.

Such a rapprochement would require the green light from the European competition authorities. In this regard, the decision of Brussels on the proposed merger between Orange and MasMovil in Spain is highly anticipated. It may or may not give the start to a vast consolidation movement on the European telecom market.

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