Altice agrees €7.4bn Portuguese deal
Altice has struck a €7.4bn deal to acquire the Portuguese assets of Portugal Telecom from Brazil’s Oi in what would be the latest high-profile acquisition for the French cable and telecoms group founded by billionaire Patrick Drahi, according to people familiar with the matter. The deal comes only a year after PT and Oi agreed to combine and will set the stage for further dealmaking by Brazil’s largest telecoms operator. These people added that the two companies were still finalising the agreement, but said an announcement could come as soon as later Sunday. Altice outlasted private equity groups Apax and Bain, which combined with Portuguese conglomerate Semapa to offer more than €7bn for Portugal Telecom. The French company said late last week that it would form a strategic alliance with CTT, the Portuguese postal operator, if it were to win the battle for Portugal Telecom. Altice already owns Portuguese cable businesses Cabovisao and Oni. The acquisition of PT would enable it to drive consolidation in the market, but it may have to make disposals to get regulatory approval. Oi is expected to use the sale proceeds to help pay down its significant debt burden so that it avoids breaching covenants with its bondholders early next year. Oi would also be able to take a stronger position in any forthcoming deals in Brazil, where it has been linked with a bid for Telecom Italia’s Brazilian business in partnership with rival groups such as Telefónica in the country. The transaction marks the latest sign of Altice’s desire to expand across Europe, just months after the company acquired the French mobile operator SFR from Vivendi for €17bn. Altice has been highly acquisitive over the past few years since striking a deal to acquire control of Numericable, the French cable group, two years ago. It has also bought a Caribbean business sold by Orange. The rapid pace of deals has led to questions about the high levels of debt carried by the group, although chief executive Dexter Goei said two weeks ago that it still had considerable headroom for the Portuguese acquisition as well as a potential bid for another French mobile business owned by Bouygues. He said that Altice saw considerable synergies in buying Portugal Telecom, which offers mobile and fast fibre broadband to most of the country, allowing it to offer "quad play" bundles of TV and telecoms, as well as cutting costs and improving procurement. Portugal Telecom has invested heavily in its networks in recent years, making it one of the most advanced providers of superfast fibre broadband in Europe with more than 60 per cent country coverage.