SFR and Patrick Drahi are drowning in debt, and it’s Xavier Niel, Free’s dad, who could benefit from it

Overindebted to the tune of 60 billion euros, Altice (SFR) and Patrick Drahi are selling certain assets in Europe. Xavier Niel, who is looking to make acquisitions, intends to take advantage of them.

Although it is the second French telecom operator in terms of number of customers, SFR, or rather its parent company Altice, has been, despite itself, at the center of business news for several years. The XXL acquisitions of past years, symbolized by SFR, Numericable or Portugal Telecom, have contributed to putting the group of businessman Patrick Drahi in debt to the tune of 60 billion euros today. While he is looking for liquidity, the latter could do the business of a certain Xavier Niel, the owner of Iliad and Free.

Free sniffs out potential acquisitions, in France and elsewhere, to expand its empire

In recent days, the turmoil around La Poste Mobile has brought back the specter of the Altice group’s debt. The story is simple: La Poste, which owns 51% of the shares of its small virtual operator, wants to get rid of it. SFR owns the remaining 49%, with certain rights (veto, priority buyout offer and pre-emption).

Problem: SFR does not want to buy what remains of La Poste Mobile, and would prefer to sell its share. This is good news, Orange, Bouygues Telecom and… Free have submitted firm offers. Xavier Niel wants to recover the 2 million customers of La Poste Mobile. But the potential links between Free’s dad and Patrick Drahi could be deeper.

We know Xavier Niel is fond of acquisitions, for a whole bunch of reasons, such as becoming a major telecom operator on the Old Continent. And it works pretty well. Iliad Italia is a success, and the group is very present in Poland, Morocco, Switzerland and Monaco, which serves as its laboratory and where it has a storefront. Including its 22.1 million subscribers in France, Iliad has 48 million worldwide. Xavier Niel has understood everything and does not want to stop there.

Xavier Niel wants to take over the first Portuguese telecom operator, owned by… Patrick Drahi and SFR

No doubt upset to have seen Vodafone close the door in its face in Italy while Iliad hoped for a merger and the creation of a major competitor to the local leader, the operator TIM, Xavier Niel recently set his sights on an operator of which Patrick Drahi is the owner: MEO, formerly Portugal Telecom, which we spoke to you about a little above.

Altice doesn’t want it anymore. We now know that three players are in the running to take over the leading Portuguese telecom operator: the American investment fund Warburg Pincus, STC (Saudi Telecom Company), a serious competitor, and… Iliad, yes!

The only European candidate in the running, the operator of Xavier Niel, parent company of Free, is strongly interested in MEO, the sale of which is rather well underway. But in Portugal, Iliad, whose cash flow is more than solid, must however deal with Saudi Telecom Company, which has already recovered 10% of the shares of the Telefonica juggernaut from its Spanish neighbor. Will Patrick Drahi favor a Franco-French strategy? It’s up to Xavier Niel to convince him.