Altice expands in U.S. with $17.7 billion Cablevision deal
By Leila Abboud
PARIS (Reuters) - Altice NV (ATCA.AS: Quote), one of the most acquisitive European telecoms groups, made a major move into the U.S. market on Thursday with a deal to buy fourth-largest operator Cablevision Systems Corp CVC.N for $17.7 billion including debt.
Altice founder Patrick Drahi, who built a telecoms and cable empire via debt-fueled acquisitions in France, Portugal and Israel, is expected to apply his cost-cutting zeal to achieve a target of $900 million in annual synergies at Cablevision.
Drahi told a Goldman Sachs conference in New York that more than 300 Cablevision employees earn pay checks of over $300,000.
"This we will change," said the French-Israeli billionaire.
Drahi entered the United States in May by buying a small, St Louis-based cable group called Suddenlink [CQUELS.UL] for $9.1 billion. He declared at the time that Altice would look for more acquisitions and eventually earn half its revenue from the United States.
In talks that began in June, Drahi convinced Charles Dolan, the patriarch of the Irish-American family that owns Cablevision, to sell. Cablevision has 3.1 million customers in New York, Connecticut and New Jersey, but it has struggled with declining video subscribers like other cable companies.
"This deal takes us into the most affluent part of the United States and will be a good basis for further expansion," said Altice Chief Executive Dexter Goei on a conference call. "We think there are significant ways to improve profitability by pooling purchasing and other costs between Cablevision and Suddenlink."
Altice will pay $34.90 in cash per share, a 22 percent premium to Wednesday's closing price of $28.54, giving Cablevision an equity value of $10 billion. Continued...