Numericable in Exclusive Talks to Buy Virgin Mobile in France

May 16, 2014 3:17 am ET

May 16 (Bloomberg) -- Numericable Group, the cable carrier that agreed last month to a $23 billion deal to buy operator SFR, is in exclusive talks to also take over Virgin Mobile in France from Virgin Group Ltd. and Carphone Warehouse Group Plc.

Numericable made an offer of 325 million euros ($446 million) in enterprise value for Virgin Mobile’s French business, the Champs-sur-Marne, France-based cable operator said today in a statement. The target is controlled by holding company Omer Telecom Ltd., whose shareholder Carphone Warehouse confirmed in separate statement Omer agreed to exclusive talks.

Virgin Mobile, with 1.7 million customers, is France’s largest MVNO, or mobile virtual network operator -- a carrier which sells wireless phone packages without deploying its own network in full. MVNOs had a 11.3 percent share of the French mobile market in the first quarter this year, according to regulator Arcep.

French phone executives and the country’s politicians have called for consolidation in the industry to help stop price wars started by Iliad SA, France’s fourth-largest carrier which has gained a 13 percent market share in 28 months since it started its mobile business. Rivals Orange SA and Bouygues SA this week said separately that they are exploring potential consolidation in the French phone market after a newspaper reported they have held talks about a possible combination.

Vivendi SA, which on April 5 agreed to sell SFR to Numericable, will contribute 200 million euros to help finance the Virgin Mobile acquisition, Numericable said.