Orange Will Get €1.3 Billion from Asset Sale
Orange agreed to sell a large portion of its fibre infrastructure to a consortium of French companies for approximately €1.3 billion. The sale is a part of a strategy to share the cost of increasing connectivity to rural regions.
Orange said in a statement that it was selling a 50 percent stake in Orange Concessions, a newly created subsidiary housing some of its fixed network assets, covering around 4.5 million FTTH plugs in rural France. It has entered into an exclusivity agreement with La Banque Des Territoires, CNP Assurances and EDF Invest for the sale, following a competitive process, which values Orange Concessions at €2.67 billion. The deal is expected to complete by the end of 2021.
The company said that the agreement will enable the subsidiary to reinforce the operator’s goals for rural connectivity development, supporting its ambitions in public initiative networks while sharing the required investment. The networks operated through the unit would be open to all operators, while Orange would continue to manage rollout and maintenance. Orange also holds a call option to enable it to take control and consolidate Orange Concessions in the future.
The sale comes as Orange prepares to outline its strategy for its mobile towers, worth an estimated €10 billion, following long-term rumours about the future of the assets. Operators in Europe have been shedding towers and other assets in an effort to raise funds to upgrade their networks and free-up funds for 5G. Commenting on the sale, CEO Stephane Richard said the achieved valuation reveals the value of Orange’s investments in fibre as well as the relevance of such a strategic move.