Thanks to Altice fibre strategy: SFR will deleverage and grow from 2019.

AMSTERDAM–(BUSINESS WIRE)–Regulatory News:

Altice Europe N.V. (Euronext ATC, ATCB) (“Altice Europe”) announces today that its subsidiary Altice France has entered into an exclusivity agreement with Allianz Capital Partners (“ACP”), AXA Investment Managers – Real Assets, acting on behalf of its clients (“AXA IM – Real Assets”), OMERS Infrastructure (“Omers”), (together the “Partners”) regarding the sale of a minority equity stake of 49.99% in SFR FTTH for a total cash consideration of €1.8 billion based on a €3.6 billion¹ equity value.

With 5 million homes to be passed (including 1 million homes built by year-end) and more to be franchised or acquired, SFR FTTH is the largest alternative FTTH infrastructure wholesale operator in France.

SFR FTTH will sell wholesale services to all operators at the same terms and conditions including SFR as customer with no minimum volume commitments.
Altice France will sell technical services to SFR FTTH for the construction, the subscriber connection and the maintenance of its FTTH network.

SFR FTTH will deploy fibre massively in the next 4 years, at least 1 million homes passed per year which will provide growth for SFR in France.

Patrick Drahi, founder of Altice, said: “I am very pleased that three of the most renowned infrastructure investors in the world are becoming our partners and committing large resources to build the leading FTTH wholesaler in Europe.

With this transformational transaction and the various tower sales and partnerships announced earlier this year, Altice Europe has been able to crystallize €8 billion of infrastructure value and obtain cash proceeds of €4 billion in total in a few months. Through these transactions, Altice France and Altice Europe will deleverage and will have access to new and cheaper liquidity to invest in its fibre infrastructure.

This transaction is creating huge value for our group, providing more fibre to our customers and more revenues and liquidities to our companies.

Thanks to its fibre strategy, SFR will grow and deleverage from 2019.”

Industrial Considerations

• First transaction of this type in Europe and creation of one of the largest European FTTH wholesalers in Europe.
• Creation of the only nationwide infrastructure challenger to the incumbent with a very strong competitive position on its footprint.
• SFR FTTH will provide the best resources, structure and organization to accelerate the deployment of FTTH in medium and low dense areas in France.
• SFR FTTH complements Altice France’s other fixed infrastructure assets: a fully modernized and fully owned FTTB network covering 9 million homes delivering up to 1Gb/s, and a fully-owned FTTH network of 2.5 million homes in very dense areas.

In total, SFR will cover more than 15 million homes in France and intend to expand further its network.

Financial Considerations

• The transaction ascribes a premium value to infrastructure assets in early stages of deployment:
  • €3.6 billion equity value¹;
  • €1.8 billion cash proceeds at closing.
• Through this transaction Altice France and Altice Europe will further reduce their net leverage ratios and significantly grow.
• Through its majority stake, Altice France will continue to make a full network return.
• Future Capex associated with the SFR FTTH roll-out is covered by a €1.8 billion non-recourse debt package to be deployed over the next 4 years off balance sheet, reducing capital intensity away from SFR.

The transaction is expected to occur in H1 2019.

Lazard acted as sole financial advisor to Altice Europe. Franklin, Mayer Brown and Ropes & Gray acted as legal advisor to Altice Europe.

Conference call details

The company will host a conference call and webcast today, 30 of November 2018 at 2pm CET (1pm GMT, 8am EST)

Dial-in Access telephone numbers:

Participant Toll Free Dial-In Number: +1 (866) 393-4306

Participant International Dial-In Number: +1 (734) 385-2616

Conference ID: 2699206

A live webcast of the presentation will be available on the following website:

https://event.on24.com/wcc/r/1891502/3089443E344997076731ABF40D59F4B8

The presentation for the conference call will be made available prior to the call on our investor relations website:

http://altice.net/investor-relations

Regulated Information

This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

About Altice Europe

Altice Europe (ATC & ATCB), listed on Euronext Amsterdam, is a convergent leader in telecoms, content, media, entertainment and advertising. Altice delivers innovative, customer-centric products and solutions that connect and unlock the limitless potential of its over 30 million customers over fibre networks and mobile broadband. Altice is also a provider of enterprise digital solutions to millions of business customers. The company innovates with technology, research and development and enables people to live out their passions by providing original content, high-quality and compelling TV shows, and international, national and local news channels. Altice delivers live broadcast premium sports events and enables its customers to enjoy the most well-known media and entertainment.

¹ Estimated equity value at closing