French telco Altice, which operates pay-television broadcaster SFR Sport, has revealed plans to split its European and US operations, as well as form a new pay-television unit which will include its major sports rights.
The announcement marks the second major overhaul at Altice in as many months. Altice USA will separate from Altice, which will be renamed Altice Europe. Altice said the separation will enable each business to focus more on the “distinct opportunities for value creation” in their respective markets and ensure greater transparency for investors.
Altice aims to complete the proposed transaction by the end of the second quarter of 2018 following regulatory and shareholder approvals. The separation is to be effected by a spin-off of Altice’s 67.2 per cent interest in Altice USA through a distribution in kind to Altice shareholders.
Following this proposed transaction, the two companies will be led by separate management teams. Patrick Drahi, founder of Altice, will retain control of both companies, with the telco stressing that he is committed to long-term ownership. Post-separation, Drahi will then serve as president of the board of Altice Europe and chairman of the board of Altice USA.
Altice USA will pay a parting dividend of $1.5bn (€1.25bn) to the European arm, Altice Europe. Divestments of non-core assets, some of which are currently in progress, should also help to pay down debt, Altice has said.
Drahi said: “The separation will allow both Altice Europe and Altice USA to focus on their respective operations and execute against their strategies, deliver value for shareholders, and realise their full potential. Both operations will have the fundamental Altice model at their heart through my close personal involvement as well as that of the historic founding team.”
The two new management teams will see Armando Pereira serve as chief operating officer of Altice Europe and strategic advisor to Altice USA for all operations. Dennis Okhuijsen will serve as chief executive and a director of Altice Europe with all corporate functions and country managers reporting into him. He will report to Drahi. Dexter Goei will continue to serve as chief executive and a director of Altice USA. He will also report to Drahi.
The Altice Europe operation will consist of three distinct operating units – Altice France, Altice International and Altice Pay TV. The latter will include the Altice Content division; major sports rights, including Uefa Champions League and English Premier League football; and other premium content rights.
Altice’s latest announcement comes after Drahi in November moved to regain control of Altice following a significant reduction in the firm’s share price triggered by a profit warning issued earlier in the month. The developments resulted in the resignation of Michel Combes, Altice chief executive.