France’s Orange has announced a $1.4 billion sale of its business in the Dominican Republic to private-equity player Altice.
Earlier this week, the two companies were reported by the UK’s Financial Times newspaper to be holding talks about a sale of Orange Dominicana, with Stephane Richard, Orange’s (Paris, France) chief executive, promising to provide an update to investors within days.
The deal – which still needs to be signed off by regulatory and competition authorities in the Dominican Republic – will give Altice (Luxembourg) control of a player serving about 3.4 million customers, as of September 2013.
Employing about 1,400 people, Orange Dominicana reported sales of about €451 million ($613 million) last year, with ‘roaming’ revenues generated by international travellers accounting for much of the figure.
Assuming the transaction goes ahead, Orange Dominicana will join a growing portfolio of telecoms and media assets at Altice, which recently swooped for a substantial stake in French cable company Numericable.
Orange, meanwhile, sees the divestment as a “significant step forward in the optimization of [the] assets portfolio”.
Like other European incumbents, the French operator is looking to reduce debt and raise funds for investment in core markets.
In France, it has been affected badly by the entry of broadband player Iliad into the mobile market in early 2012.
Forced to slash prices or risk losing customers, Orange needs to continue funding the rollout of high-speed fixed-line and mobile networks, with a variety of competitors trying to win market share in these areas.
Orange Dominicana had reportedly attracted interest from the UK’s Cable & Wireless (London), Jamaica’s Digicel (Kingston) and the Dominican Republic’s Grupo Leon Jimenes (Santo Domingo, Dominican Republic), but the first two were said to have ruled themselves out of bidding for the business earlier this week.
However, in its statement on the transaction, Altice says it is close to finalizing an agreement with Grupo Leon Jimenes that will see the Dominican conglomerate become a partner in both Orange Dominicana and Tricom, a fixed-line player which Altice already owns and which serves about 600,000 customers in the country.
Altice says its strategy is to combine fixed and mobile assets to provide so-called quad-play services over state-of-the-art networks.
“We are very pleased with the acquisition of Orange Dominicana which is demonstrating strong growth and provides for … a perfect fit with our strategic vision to offer high quality quadruple-play services to our subscribers,” said Dexter Goei, Altice’s chief executive. “Combined with our acquisition of Tricom, this is another great example of our strategy of in-market and regional consolidation.”