Business

Bouygues bids 10.5bn euros for phone rival SFR

The three logos of French mobile operators : SFR, Bouygues and Orange Image copyright AP
Image caption Bouygues and SFR could become France's largest mobile phone company

French corporation Bouygues has made a 10.5bn-euro (£8.7bn) takeover bid for mobile phone operator SFR.

The bid to combine Bouygues Telecom and Vivendi-owned SFR would create the largest mobile phone service provider in France.

The merger would leave only three mobile phone companies in France.

Rival firm Altice, which owns French cable TV operator Numericable, has also made an offer for SFR, but has not said how much it has offered.

Bouygues Telecom and SFR are France's second and third largest mobile phone companies. Their merger would mean they would overtake Orange to become the largest mobile phone company in France.

Before the deal can go ahead, competition regulators in both France and the European Union will need to approve it. A similar offer by Telefonica for E-Plus in Germany has already raised competition questions in Brussels.

Consolidation

Industry analysts said the Bouygues offer reflected a broader trend of consolidation among mobile phone operators on the European continent.

There are currently 150 mobile phone companies across Europe. In the United States, there are just four.

French mobile phone customers have benefited from lower prices since the arrival of mobile operator Free Mobile into the market seven years ago.

But market analysts said price cuts were all but certain to come to an end if the Bouygues takeover went ahead. They added this could cause the government to think twice about letting the SFR deal go through.

Bouygues said the deal would help it invest in infrastructure and protect jobs, helping to boost the ailing French economy.

"They're very much positioning it as the benefits this would bring in terms of the economy and jobs," said Kester Mann, an analyst at CCS Insight.

Dario Talmesia, principal analyst at Informa Telecomes and Media, added Vivendi would view the offer from Bouygues as "the most appealing one", but added: "The safest one is Altice."

He added: "What's happening in Germany can be a good indicator of what can be happening in France and the rest of Europe."

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