Telecoms : Iliad
At the end of July 2014, France’s Iliad made a $15 billion cash offer for a controlling 56.6 per cent stake in US’s fourth largest mobile telecom operator, T- Mobile US. Iliad is a French low-cost telecoms operator controlled by Xavier Niel, the French billionaire.
Initially, Germany’s Deutsche Telekom which owns T-Mobile US wanted to sell the latter to Sprint which is the number three mobile operator in the US. Deutsche Telekom was keen to sell T-Mobile US as it needs a lot of cash to transform its old copper network in Germany and bring it into the age of superfast broadband.
At the beginning of August, however, Sprint abandoned the pursuit of T-Mobile US amid concern that US regulators would not approve a merger of the third and fourth operators which would decrease competition in the market. This left Iliad as the only offer for T-Mobile US, to date, with no antitrust risk.
Xavier Niel who was a top software programmer in his teens, invented France’s first set-top box which delivered the ‘triple play’ (internet, telephone and television) in 2002. Niel is known in France for undercutting larger rival operators with his offers like the ‘triple play’ and Free Mobile. He sees his venture in the US, as an opportunity to bring his methods to the US, the world’s largest telecom market. Though T-Mobile US is already a low cost operator, he believes that he will be able to bring a further $10 billion in synergies to T-Mobile US shareholders.
The latest news at the beginning of September is that Iliad is considering joining up with industrial and financial partners with the possibility of buying up more of the capital of T-Mobile US.
In October 2014, Deutsche Telecom rejected an improved offer for T-Mobile, by Iliad. Amongst other factors, the reason for the refusal could be that in the end the German operator did not really want to part with its main asset outside its home country, to the benefit of European competitors.
Sources: lefigaro.fr, lesechos.fr, wsj.com, Bfm Business
Video Sources : http://www.youtube.com/watch?v=81tIR8IvH1E
First online publishing, September 10th, 2014. Updated 14th October 2014.