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Have Numericable / SFR Breached their Pre-Merger Conditions?

  • Europe
  • France
  • Competition, EU and Trade - Competition e-briefings



In April 2014, after a bidding war lasting weeks, Numericable – a Luxembourg-based cable provider largely active in France’s telecoms sector – was successful in the purchase of Vivendi’s French Telecom subsidiary SFR.

As detailed in our article of 12 September 2014, the merger went to an in-depth Phase II review by the French Competition Authority, l’Autorité de la Concurrence (the “Autorité”). Numericable had to offer significant remedies in order for the transaction to gain approval, including allowing rival operators access to its cable network, which is the first time such remedies were even made, and divesting of its telecoms unit which functioned in the overseas French territories of La Réunion and Mayotte due to the organisation’s dominance in the Indian Ocean island market.

The Raid

On Thursday 2 April 2015, the Autorité conducted unannounced dawn-raids at the two office locations of the merged entity and, according to reports, sealed off certain offices as part of an ongoing investigation.

It has since emerged that Numericable’s rival bidder, Bouygues Telecom, raised concerns with the regulator in November last year over whether the companies had begun to deal commercially prior to the transaction receiving competition clearance (so-called “gun-jumping” practices). Reportedly, the particular concern was that Numericable owner, Patrick Drahi, was already in charge of commercial and strategic decision-making at SFR.

Other rival operators, including Orange and Free, had apparently also made the Autorité aware that SFR launched an advanced set-top box offering based on Numericable’s box, La Box TV Fibre, almost immediately after Numericable was granted permission to go ahead with the merger, but crucially before the deal had received full clearance.

Both companies could face potentially large fines if they are found to have implemented the merger early. It is prohibited to implement any merger transaction before it receives the clearance of the competent competition authorities both under EU and French law and fines can reach up to 5% of the turnover of the companies concerned. In the past, the Autorité has imposed fines ranging between €250,000 and €4,000,000.


Dawn raids are most commonly carried out where competition authorities suspect anti-competitive behaviour such as cartels or price-fixing. Therefore, the fact that the Autorité has conducted an investigation in relation to the Numericable / SFR merger highlights how crucial it is for organisations to have strict processes in place for holding undertakings separate until merger approval is granted.