Three separate merger notifications to two different competition authorities provides for an atypical, and complex, review process
Bouygues Telecom would pay the most but gain the most
On 6 June 2026, Bouygues Telecom, Iliad and Orange announced that they had signed a Memorandum of Understanding (MoU) with Altice France to jointly acquire SFR, the country’s second largest operator, based on a total enterprise value of €20.35bn (£17.59bn). The “consortium” stated that the deal represents one of the largest industrial transactions in the European telecoms sector, and aims to create long-term value for all stakeholders, including customers, employees, partners, suppliers and investors. While SFR’s spectrum holdings would be shared fairly evenly across the three operators, the split of the price between buyers would be around 42% for Bouygues, 31% for Iliad and 27% for Orange. The assets would be divided as follows:
Bouygues would acquire SFR’s business activities, customer base and fixed infrastructure, part of SFR’s consumer operations (5.9m customers), the Prixtel MVNO (0.5m customers), SFR’s mobile network in less dense areas (part of the “Crozon” network sharing agreement between the two operators) and SFR’s share of the fibre co-investment agreement with Bouygues (known as “Faber”);
Iliad would acquire SFR’s RED customer base (6.0m customers) and part of SFR’s consumer activities (1.6m residential customers, as well as 0.4m small business customers);
Orange would acquire part of SFR’s consumer activities, as well as SFR’s Régio, Syma and Coriolis MVNOs (a total of 4.9m customers).
The acquiring parties are alive to the social implications of the proposed transaction
According to the acquiring parties, the “transformational transaction” would preserve a highly competitive ecosystem and reinforce the sector’s long-term capacity to invest, innovate and anticipate major technological changes. By enabling each operator to gain scale and boost their investment capabilities, the deal is intended to support the development of more resilient, sovereign and high-performing digital and telecoms services and infrastructure in France. It is claimed that the combination of SFR’s assets with those of the remaining operators would generate significant synergies (mostly in terms of opex), which would ultimately flow through to consumers. Consolidation has been rumoured ever since Iliad-owned Free’s disruptive entry into mobile, which caused retail prices to plummet, raising questions about the sustainability of the market structure. Interestingly, however, the consortium noted that it is “paying special attention to the social implications” of the proposed deal, stating that migrating millions of subscribers, infrastructure and systems represents a multi-year industrial programme, which would depend directly on the skills of the existing SFR teams. The consortium has therefore pledged to ensure employment for all acquired staff until early 2029, and is seeking “responsible and constructive” engagements with the relevant employee representative bodies.
The deal could offer an early test of the EC’s updated approach to merger reviews
As stated by Christel Heydemann (CEO, Orange), the consortium’s strategic announcement marks a decisive step for the French market, with the signing of definitive legal documentation expected in H2 2026. However, the transaction remains subject to the approval of the competent regulatory authorities, with whom each party will soon initiate the necessary discussions. Bouygues and Orange are to notify their proposed acquisition to the Autorité de la Concurrence in France, where they generate more than two-thirds of their EU-wide turnover. In contrast, Iliad – which is also present in Italy and Poland – is expected to meet the requirement for notification to the EC, adding a layer of complexity to the merger review process.
The MoU follows closely behind the EC’s draft merger guidelines, which – among other things – indicate a greater openness to scale-enhancing mergers and position the impact on investment front and centre in the competitive assessment. While Heydemann, as well as Mike Fries (Chairman and CEO, Liberty Global) and Margherita Della Valle (CEO, Vodafone Group), has remarked positively on the EC’s proposals, she considered that DG COMP would never completely walk away from the impact on consumer prices as a likely indicator of the merits of a merger. The consortium is hopeful that the transaction could close in H2 2027 once the required approvals, including from competition authorities, are obtained, although at this stage, it cannot be guaranteed.
