On Friday 27 November, the European Commission cleared under the EU Merger Regulation the proposed acquisition of Covage by SFR TFFH, a company jointly controlled by Altice, Allianz and Omers. The approval is conditional on full compliance with a commitments package offered by Altice, Allianz and Omers.
Margrethe Vestager, Executive Vice-President responsible for Competition Policy, said it was “important for local authorities to have alternative suppliers for the construction and management of high-quality fibre-to-the-office networks”. As Covage competes directly in these markets with Altice’s SFR business, “we approved the acquisition of Covage thanks to comprehensive divestments to ensure that competition will remain to the benefit of local and international customers and consumers in France”, she explained.
Altice/SFR FTTH and Covage are the main fibre network operators in France. Covage only sells fibre network accesses at wholesale level, while Altice is active at both wholesale and retail levels. Allianz and Omers are financial investors who jointly control SFR FTTH alongside Altice.
The Commission's investigation found that the transaction, as initially notified, would have raised serious competition concerns (horizontal overlaps in the wholesale FTTO access networks market, vertical concerns given that Covage would become vertically integrated into SFR's retail activities).
To meet the Commission's competition concerns, SFR FTTH has offered the following commitments: - The divestment to a suitable buyer of 25 subsidiaries and of assets corresponding to Covage's local fibre loop business on the territory of 30 public institutions; - The offer of a transitional service agreement (including access to all assets and services required to operate the divested business competitively for a duration enabling SFR FTTH to become fully independent). (Original version in French by Lionel Changeur)