Numericable-Virgin deal approved by French regulator
City Index November 28, 2014 8:26 PM
<p>Numericable’s acquisition of Virgin Mobile France has been approved by the country’s competition regulator.</p>
French telecom operator Numericable’s acquisition of Virgin Mobile France was approved by the country’s competition regulator yesterday (November 27th).
Numericable, which is also in the process of buying France's second mobile operator SFR, agreed in June to buy Virgin Mobile France from Carphone Warehouse and the Virgin Group for an enterprise value of €325 million (£258 million).
An IPO was initially considered, but the current telecom consolidation trend, coupled with the desire from Altice (owner of Numericable) to grow its customer base, led Virgin Mobile's owners to sell, Le Monde reports.
As a mobile virtual network operator (MVNO), Virgin Mobile rented capacity on the network of SFR to serve its customers.
The regulator approved the deal on the condition that the cable giant allows rivals to lease capacity on its fixed broadband network so they can devise their own fixed-mobile offerings.
Funding for Virgin Mobile's operations will be mainly provided by Vivendi, the former owner of SFR, which should bring €200 million out of €325 million.
MVNOs represent seven per cent of the telephony market share in France. These virtual operators have long thrived on low-cost packages for highly targeted users.
France's competition authority was concerned that the expansion of Numericable's customer base through the purchase of SFR and Virgin Mobile would allow it to exert leverage through marketing offers combining Internet access at very high speed and mobile services, arguing that other MVNOs could be penalised.
But the authority pointed out yesterday that the commitments made by Numericable to SFR already prevent that risk.
Find up to date information on the FTSE 100 and spread betting strategies at City Index.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.