The month-long tussle involving French politicians, unions, operators, industrial titans and regulators ended up with an agreement built around pretty-much the original deal. (see - Likes it so much he's looking to sell the company). Cable operator Numericable is to add mobile telephony to its holdings; Vivendi is to get itself out of the mobile business, and Bouygues is left to lick its wounds and wonder where it will go next.
About the only voice not heard much through all the hubub was that of the user.. but that’s not unusual.
On Saturday, Numericable agreed to offer Vivendi €13.5 billion for SFR, a 20 per cent stake in the resulting SFR-Numericable company, along with a €750m delayed payout, which valued SFR at €17 billion. The rival Bouygues offer was for €15.5 billion in cash and 5 per cent of the resulting Bouygues/SFR joint venture - also adding up to around €17 billion.
What pushed Vivendi to towards Numericable appears to have been the French governnment’s worry over unemployment. The industrial logic of an SFR/Bouygues merger was that it would take a player out of the French moble market, reducing its competitive components from four to three. Having done that it would deliver scale and synergies to the combined entity.
The downsides of the synergies, of course, are the inevitable redundancies accompanying the consolidation. Job-loss is simply unpalatable to the French government - according to a statement from Vivendi - and the fact that SFR/Bouygues would end up with getting on for half of the French mobile market made it more than likely unpalatable to the European competition commissioner, who is already pondering the wisdom of allowing the consolidation of the European mobile market.
The mood music late last year from Fleur Pellerin, France's digital economy minister, was that there were simply too many players in the market and one of them, Free, was misbehaving by setting its prices too low. Things had to change. Little wonder that observers thought the government was pushing for the Bouygues option, despite the difficulties.
So given the employment and competition problems, in the end Vivendi plumped for its original suitor, mostly on the basis, it claims, that the prospects for growth were better in a multi-play environment with Numericable.
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