Altice Agrees €2.3bn Portuguese Fiber Wholesaler Deal With Morgan Stanley

MEO will sell a minority equity stake of 49.99 per cent in Altice Portugal FTTH (fiber-to-the-home) based on an enterprise value of €4.63 billion. Under the terms of the deal, €1,565 million will be paid in 2020, €375 million will be paid in December 2021 and €375 million will be paid in December 2026 subject to performance.

Uría Menéndez, along with Franklin and Ropes & Gray, acted as legal advisers to Altice Europe. Lazard acted as sole financial adviser to Altice Europe.

An Altice statement said it was the “first time in Europe that an incumbent telecom operator separates its fiber into a dedicated wholesale vehicle.”

Altice Portugal FTTH is by far the largest FTTH wholesaler in Portugal – around four million FTTH homes will be covered by year-end 2019.

Altice Portugal FTTH comprises all of MEO’s fibre assets in Portugal including FTTH and dark fiber. Altice Portugal FTTH will sell wholesale services to all operators at the same financial terms.

MEO will sell technical services to Altice Portugal FTTH for the construction, the subscriber connection and the maintenance of its fibre network.

Patrick Drahi (pictured), founder of Altice, said: “I am very pleased that our partnership with Morgan Stanley Infrastructure Partners, initiated in the context of our Portuguese tower transaction in 2018, now continues with a transformational fiber project.

“This fantastic transaction with our long-standing partners at Morgan Stanley Infrastructure Partners will accelerate the deleveraging of the Group towards its stated leverage target. It will open the way to significant refinancing transactions in 2020 enabling us to accelerate our announced program of debt interest reduction (target of €0.7 billion annual savings).”