Telecoms M&A: Enforcers take aim at gun-jumping

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Jean-Julien Lemonnier, Counsel at international law firm White & Case, takes a look at the issue of ‘gun-jumping, which has recently landed Altice in hot water.

Telecoms multinational Altice recently found itself under fire for conduct around its acquisition of Portugal Telecom, receiving a record breaking €125 million euro fine in April 2018 from the EU commission for ‘gun-jumping’. This is not the first fine imposed on Altice for gun-jumping. In November 2016, the company was fined (€80 Million) by the French Competition authority on the same grounds (acquisition of SFR and another company).

Gun-jumping, or a breach of the standstill obligation, is a violation which occurs when parties take steps to implement a transaction prior to having received clearance from the competition authorities. Parties involved can be fined and ordered to unwind any steps they have taken.

With regulators across the globe increasingly monitoring and taking action against gun-jumping, and an apparent surge in M&A activity across the Telecoms sector, companies involved in these deals need to be aware of the issue and how to avoid falling foul of the rules.

What does gun-jumping entail?

Most practitioners classify gun-jumping as a scenario in which the parties to a transaction appropriately send formal notification of the transaction to the relevant competition agency, but then coordinate their activities during the mandatory pre-closing suspensive period. This conduct is referred to as ‘substantive gun-jumping’, and it usually leads to an intricate approach by competition authorities involving several theories of harm. Competition enforcers also often look into what is called ‘procedural gun-jumping’, which is a separate infringement for a complete absence of any filing before the respective authority (see for instance the recent decision of the Danish Competition and Consumer Authority, that saw companies fined approximately €540.000 for not notifying a merger).

Why is gun-jumping a trending topic in 2018?

Gun-jumping has been in the spotlight for the past several years and telecoms companies need to be keenly aware of the increasing activism of local and global antitrust enforcers. Recently, both procedural and substantive gun-jumping have been widely sanctioned, with several fines ranging in the millions of euros.

A clear trend can be discerned in cases spanning all continents and sectors. In 2016, in North America, the US Department of Justice fined Flakeboard and SierraPine a combined total of close to US$5 million dollars for pre-closing coordination conduct in violation of the Hart-Scott-Rodino and Sherman antitrust acts. The same year in South America, CADE, the Brazilian competition agency, sanctioned Cisco and Technicolor approximately €8 million after having issued gun-jumping guidelines in 2015.

In Asia, MOFCOM, the Chinese competition enforcer, has recently put in place a gun-jumping whistleblower notice and has sanctioned a foreign undertaking (Canon, for its acquisition of Toshiba Medical) ¥300,000 (€38,000 approximately).

In Europe, in 2014 the Commission fined the Norway-based Marine Harvest €20 million (the case was upheld by the General Court and is now pending in the Court of Justice). In April 2018, the Commission imposed a €125 million fine upon Altice for implementing its acquisition of Portugal Telecom (Altice lodged an appeal against this decision). Member States including Poland, Romania, Spain, Austria and several others have imposed fines ranging in the hundreds of thousands on local operations.

In the UK (in the context of an ex-post control in May 2018), the Competition and Markets Authority imposed a £100,000 penalty upon a company for a failure to comply, without reasonable excuse, with the requirements imposed by the interim order issued by the CMA (which required the company to seek the CMA’s consent before taking any action which might prejudice a reference of the merger or impede the taking of any action under the Enterprise Act 2002 by the CMA).

Multiplication of these cases helps to have a better understanding of behaviours that may or may not constitute gun-jumping practices.

As such, in the context of the acquisition of KPMG Denmark by EY, the Danish Competition Authority ruled that the companies, by announcing the early termination of KPMG Denmark cooperation agreement with KPMG International, had jumped the gun. On appeal, the Danish Maritime and Commercial Court referred the case to the European Court of Justice for a preliminary ruling on the interpretation of the standstill obligation.  The ECJ stated on May 2018 that the termination of the cooperation between KPMG Denmark and KPMG International before the merger approval by the Danish Competition Authority does not violate the gun-jumping prohibition because the termination did not contribute to a change of control over KPMG Denmark. This decision leave room for a treatment of conducts which do not contribute to a change of control, based on antitrust laws.

On this ground, other jurisdictions, like in the US, sanctioned parties to a merger because of a coordination of their competitive conduct prior to the closing. Very recently, the Australian Competition and Consumer Commission (ACCC) has taken its first proceedings in relation to gun-jumping against a company specialising in biological storage and management, for alleged cartel conduct in the context of the acquisition by a company of its assets in cord blood and tissue banking business.

In France, up until the Altice decision, gun-jumping sanctions had only been imposed where there was a complete lack of notification with the national enforcer. However, Altice—which is a full-on substantive gun-jumping case—has been in the spotlight for over a year, raising several questions for future operations.

Is the Altice case in France indicative of a shift towards a more restrictive stance on pre-clearance conduct? 

The French Competition Authority’s (FCA) analysis in the Altice case of November 2016 has been widely discussed by practitioners as it was the first time, at least at the European level, that a gun-jumping decision provided an almost ‘catalogue-like’ and in-depth assessment of several types of pre-closing practices.  With Altice, the FCA appears to have taken a bold step, imposing, at the time it was rendered, the highest worldwide fine for gun-jumping conduct: €80 million.

There is spirited debate among practitioners as to how to interpret the somewhat restrictive approach of the decision in several key areas, notably information exchange. In particular, as far as information exchange is concerned, the FCA has held that ‘whatever the reasons for which the undertakings would need to exchange information, it is incumbent on them to establish a framework which would eliminate all communication of strategic information between independent undertakings in light of the Guidelines on the applicability of Article 101 TFEU [Treaty on the Functioning of the European Union] to horizontal cooperation agreements’ (paragraph 260). Furthermore, the wording of the decision (here quoted from an English translation of the decision) appears to make it difficult for in-house legal advisers to be included in the deal process. Moreover, it seems that they ‘cannot be considered as making possible the avoidance of the dissemination of strategic information between the two undertakings’.

The decision continues: ‘As a matter of fact, the two individuals who were the recipients of the commercially sensitive information were the in-house counsels, who are not subject to the same rules of confidentiality applicable to external attorney. They are subject to the hierarchic authority of the company and cannot be considered as independent of the company’s management.  For this reason, it should be considered that their access to commercially sensitive information is equivalent to the entire company obtaining access to the said information (paragraph 318).

During a March 2017 conference, the FCA attempted to limit the decision’s reach by stating that it consists of more of a sui generis decision than a landmark one. As regards the involvement of in-house legal divisions in deal process, the FCA explained that its intention was to prevent it, but to remind that in such a case, precautionary appropriate measures have to be put in place. However, the decision could have broader implications because this rigid approach taken by the Authority forms part of the body of precedents of its administrative practice and therefore could lead to similar cases in the future.

What advice should be given to dealmakers in the current regulatory climate?

Facing questions arising from recent gun-jumping cases, several authorities have published guidelines in order to inform companies considering an M&A transaction.

As an example, the Brazilian Administrative Council for Economic Defence (CADE) issued its “Guidelines for the analysis of previous consummation of merger transactions”.

Likewise, the U.S. Federal Trade Commission (FTC) published on March 20 2018 updated guidance to sensitize undertakings of the risks of sharing information with a competitor before and during negotiations.

In France, following the Altice case, Isabelle De Silva, President of the FCA, published an article in May 2018 to shed light on the competitive issues of this decision.

Several lessons can be drawn from these documents and cases.

In general, caution should be taken towards potential issues related to sale or purchase agreements (SPAs). In particular, the wording of the SPA should not be over-restrictive, granting veto rights over certain types of conduct of the target, which would result in de facto control. On the other hand, the acquirer and the target should not over-interpret the SPA clauses. In the French Altice case, SFR asked for Altice’s approval of certain actions without the SPA expressly requiring it, giving the FCA the impression of control.

Information exchange also appears to be a more and more controversial area in merger control (and also from an antitrust perspective), meaning that the composition and internal functioning of ‘clean teams’ may fall under the scrutiny of competition authorities in order to ensure that adequate safeguards are applied.

Joint commercial dealings are another type of conduct that should be handled with caution. The joint conception of future projects during the suspensive period could be flagged by competition agencies. As seen in the French Altice case, the FCA sanctioned a joint project of the acquirer and the target that was conceived during the suspensory period and was launched just days after clearance was granted.

What can we expect from the road ahead?

At the time of writing, the Commission has just released on its website the public version of its Altice decision. At first glance, the facts appear to be comparable if not sometimes identical to the French Altice case (especially the exchange of commercially sensitive information, the intervention in marketing campaigns, and the contents of the SPA). We can expect that the debates that will take place in the coming months will provide additional guidance on how to interpret the wording of this (125 page) decision. Likewise, additional criteria may be provided by the Commission (Canon/Toshiba case), and in national competition authorities’ decisions, which should be rendered in the coming months.

Altice raises €2.5 billion by flogging some towers

Debt-riddled French telco conglomerate Altice has raised some much-needed cash by selling stakes in two of its tower holdings to private equity.

The the total cash consideration is €2.5 billion, with KKR getting half the French towers business, while three quarters of the Portuguese towers business are being snapped up by Morgan Stanley and Horizon. There is much talk of what a good deal this is and how it will enable the relevant bits of Altice to focus on their core stuff, but this is all about eating into its massive debt pile in a bid to repair the catastrophic damage it experienced last year.

“I am enthusiastic about creating new tower partnerships in France and Portugal,” said Altice founder Patrick Drahi. “With KKR, Morgan Stanley Infrastructure Partners and Horizon Equity Partners, we have found long-term partners of the highest-quality who share our vision to invest in leading infrastructure and growth opportunities.

“We will create a leading European tower business, including the number one in France. Both tower businesses will be uniquely positioned to grow as they provide increasingly important infrastructure services to operators in both markets. Simultaneously, these transactions underline our commitment to delever and proactively manage our balance sheet while highlighting the significant underlying value of Altice Europe’s business.”

If Drahi hoped this move alone would have a profound effect on Altice’s share price he must feel pretty disappointed as it has been met with a distinct shrug. The French tower joint venture is called SFR TowerCo, but Altice stock is far more sensitive to the fortunes of the SFR telecoms business than a few towers, and that remains a challenge. You can read further analysis of the move at Light Reading here.

Altice does some more corporate tinkering

French telecoms conglomerate Altice has announced a good old reorganization in the light of its dodgy 2017.

The big move involves spinning-off Altice USA, which already has its own US stock market listing. The core company – Altice NV – will relinquish its 67.2% interest in Altice USA by handing it over to its own shareholders as well $1.5 billion in cash from Altice USA. This all seems rather convoluted but the upshot is greater separation in the running of the two corporate silos.

Founder Patrick Drahi will still own a big chunk of both and thus be in charge of them, but Altice USA will still be run by Dexter Goei and Altice CFO Dennis Okhuijsen will become CEO of Altice Europe, which itself will be split into Altice France, Altice International and Altice Pay TV, which does what it says on the tin.

“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 realize their full potential,” said Drahi. “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.

“Altice Europe has tremendous opportunities as we deliver on our operational aspirations around much improved customer service and monetizing our premium infrastructure and content assets. Altice Europe has a unique asset base that is fully converged and fiber rich with strong number one or number two position in each market with nationwide fixed and mobile coverage. At the core of our strategy is the operational and financial turnaround in France and Portugal. In parallel, we have a clear plan to further strengthen our long-term balance sheet position as we execute our non-core asset disposals.

“Altice USA sees exciting opportunities in the US market as we start 2018 with strong momentum. We have a full operational agenda to deliver best-in-class services to our customers, drive innovation and advance our fiber investment strategy. The new organization structure will enable us to focus even more on executing this agenda while enhancing transparency for our investors. We remain confident in achieving the objectives we set out at the beginning of our journey in the US and affirm the efficiency targets set out at the time of the acquisitions of Suddenlink and Optimum.”

Among all this corporate verbiage, tinkering and general shenanigans seems to be some promising stuff, at least according to investors, as the Altice share price was up round 10% at time of writing. It’s still well below where it was three months ago, mind.

Combes sprints over to the US following Altice failure

Former Altice CEO Michel Combes wasted little time in moving on from his sacking by securing the CFO gig at US operator Sprint.

Combes full job title is actually President and CFO, but he will still report into Sprint CEO Marcelo Claure, so the first position seems somewhat redundant. This also feels like a backward step for Comes in terms of job role, having previously been CEO at French telecoms conglomerate Altice and before that CEO of Alcatel Lucent.

The Sprint release insists Combes is an ‘accomplished telecom and cable industry executive’. It’s certainly hard to argue with a CV that also includes stints at Orange and Vodafone, but the extent of his accomplishments remains up for debate. Having overseen a halving of Altice’s share price in the space of just a week last November, Combes was thrown to the wolves, but Claure clearly thinks that was Altice’s mistake.

“Michel is an extremely capable and accomplished global telecom and cable industry leader and I know bringing him on board will help to accelerate our progress as Sprint begins the next chapter of our transformation,” said Claure. “He is a visionary executive with a proven track record of successfully transforming leading telecom and media companies and will help us to execute our strategic plan and strengthen our team.”

Combes follows the current trend of failed European telecoms execs grabbing a gig at a US operator to make ends meet. Sacked Ericsson CEO Hans Vestberg, of course, ended up at Verizon. It seems that once you get to the top table in the telecoms world, losing your job is not much of a problem because there will always be other C-suite opportunities magically cropping up.

“I have known Marcelo for many years and am delighted to join the Sprint team and build upon the great progress achieved to date,” said Combes. “This is an exciting challenge and unique opportunity to help lead a distinguished company through an historic turnaround and its most exciting period yet.”

Sprint’s shares fell 5% when the appointment was announced late last week.

RCom, Altice and BT show you can’t just spend your way to relevance

Digital transformation has turned the telco industry on its head with some telcos trying to buy themselves out of the hole, but recent events have proved money isn’t always the answer.

There are three events which we think demonstrate this ignorance aptly; the growing pile of insolvency petitions at the Reliance Communications, Goldman Sachs trying to cut its exposure at serial spender Altice and BT’s fragile-looking gamble in the sports content space. In each case there is hope to turn fortunes around, but there is damning common trait as well; failure to transform into an agile, combative organization ready for the connected economy.

Reliance Communications doesn’t prove to be a reliable investment

Reliance Communications has been circling the drain for quite a while, the signs were there long before the insolvency rumours emerged, but this just shone a light on inadequacies. The latest bombshell, according to Bloomberg, involves Fortuna Public Relations, which has asked an Indian court to place the telco under insolvency proceedings on the grounds it has failed to pay its bills.

Unfortunately for Reliance Communications, this $70,000 bill (roughly) isn’t the only financial headache. It’s largest creditor, China Development Bank hit it with an insolvency petition last week, while Manipal Technologies and Ericsson’s Indian business have also done the same.

The threat here was Reliance Jio. Jio changed the landscape of the Indian telco space, moving the consumer away from minutes and SMS, and onto data. It shook the market, and Reliance Communications is just one of several telcos which has suffered. To combat the threat, Reliance Communications tried to purchase fellow struggling telco Aircell, using the logic of scale to counter the digital transformation threat. This deal clearly fell through, and it looks like everyone is just getting bored with Reliance Communications.

The problem with Reliance Communications is it simply did not adapt to the new landscape in the Indian market. It didn’t move enough customers onto more lucrative postpaid contracts and didn’t evolve its offering to be more data-centric. It lost its relevance to the consumer which was eager to consume as many digital services as possible.

BT’s gambling habit comes back to bite

CEO Gavin Patterson has led the charge to dominate the sports content world, but according to the FT, BT is scaling back its ambitious position in the sports stakes.

At a Morgan Stanley investor conference in Barcelona, Patterson is acknowledging the possibility BT might lose the Premier League rights auction in February, and is putting together a plan B. Having spent £3.8bn on football rights since 2012, it would appear the shift into content and the multi-play market has not worked out as expected.

While purchasing sporting rights was not necessarily a bad move, BT forgot about everything else. It might have some of the best sports properties around but want about movies, or TV series, or culture? Perhaps BT focused too much on content with a shelf-life, as opposed to investing in areas which provide a more secure foundation.

Sport will always be relevant, and an excellent way to engage consumers, but you never own the rights, you are simply leasing them for a couple of years before another bidding war. When it escalated the price a couple of years ago, a trend begun, which has increased the price of Premier League and Champions League rights each year.

BT is perhaps the architect of its own downfall, as you have to wonder whether the billions spent on securing these rights is worth it. When you looking at the underwhelming growth of BT’s TV business this year, you might suggest it is not.

This is only one problem however. BT tried to buy its way to relevance, but it’s content platform did not evolve with the scale of its ambitions. Unlike Sky or Netflix, some have pointed at the BT platform suggesting it is not very user friendly. Customer experience will be the winner in many people’s eyes, and BT failed to evolve its platform to meet the requirements of the demanding customer.

Altice spending spree does not repay investor confidence

Altice is another company who tried to gain entry into the digital economy by flashing the cash, but investor confidence is pretty low according to the FT, as operational performance failed to back up the billions spent by Chairman Patrick Drahi on acquisitions.

Goldman Sachs is the nervous investor in question, as it has apparently been trying to reduce its credit exposure at Altice for the last couple of weeks. And there is some pretty good reason for the nervousness. Shares plummeted downwards after the most recent quarterly results demonstrated poor ROI from recent acquisitions, as well as a mountain of debt measuring €51 billion.

Altice has been on a spending spree over the last few years in an attempt to create a content empire to rule the world, alas, it seemed it forgot to do anything with any of the companies it bought. It would appear Drahi was more concerned with growing the size of his kingdom rather than actually making any money from it.

Recent acquisitions have included video ad tech firm Teads for $307 million, $17.7 billion purchase of Cablevision, €7.4 billion for telco PT Portugal, $9.1 billion for Suddenlink Communications, SFR for €17 billion and Virgin Mobile France for €325 million.

Drahi does appear to be an excellent deal maker, though the Goldman Sachs nervousness does seem to indicate debt has been allowed to rise to high compared to the performance of the business. Perhaps this is another case of someone believing the way to dominate an industry is to throw as much money as possible at it.

Back to that annoying buzzword…

When you look at the businesses which has successfully ventured into the digital economy, this has been done through intelligent purchasing decisions, but also designing products which are more suitable for the connected economy. Orange is a very good example.

Not only has Orange invested heavily in fibre and 4G technologies with the aim of long-term profitability, it looked to areas of disruption outside the traditional telco comfort zone to seek new revenue opportunities, as opposed to pleading the same subscriber. Its venture into the banking world is an excellent example of marrying its mobile expertise, with an industry which was ripe for disruption.

Unfortunately for Reliance Communications, BT and Altice, the fundamentals of the business didn’t seem to change, there was simply money exchanged in the belief it would ready the business for the onslaught of the digitally native consumer. While acquisition is not necessarily a bad strategy, it has to be done for the right reasons. Google’s acquisition of YouTube, for instance, was an excellent example of a company looking ahead of the curve, while Orange’s acquisition of Groupama in April 2017 took it into a new vertical to potentially be the disruptor.

In the three examples above, it seems the companies wanted to avoid the difficult job of digital transformation, instead choosing to try and buy themselves out of a hole. Doesn’t look like it worked this time though.

Altice could flog Dominican Republic business to address debt pile

French telecoms group Altice is planning to sell its business in the Dominican Republic to show it’s serious about whittling down its debt pile, according to a report.

The scoop was grabbed by the FT, which reports that the process of selling Altice Dominican Republic is in an early phase, and so might not happen. Reuters also has sources close to the plans and it reports that Altice is hoping to get around €3 billion from the sale of a business it paid €1.1 billion for in 2013.

Altice has accumulated €50 billion of debt in acquiring companies like SFR in France as well as a US spending spree. Its share price has gone down the toilet this year as weaker than expected earnings catalysed negative speculation about Altice’s ability to manage its debt pile. All this has already cost the Altice CEO his job and forced the company to make a special announcement designed to calm market nerves at the start of this week.

The share price received a small boost when the FT story about the Dominican Republic sale broke, but those gains have since been lost. A likely reason for this will have been the decision by credit rating agency Standard and Poor’s to downgrade its outlook for the Altice USA due to the weakness of its parent. Here’s the stated rationale.

The outlook revision follows the downward revision by management of its EBITDA growth expectation for 2017 to about 6% organically at group level from high-single digits, primarily due to weaker-than-expected operations in France–where the group generates about 40% of its consolidated EBITDA–which reportedly stem from management and operational setbacks. Coupled with a continued very competitive environment and our view that the group’s differentiation strategy with content and network investments has not proved its effectiveness yet, we have lowered our expectations for EBITDA growth in France to -2.5% on average for 2016-2018 from more than +3%. In addition, the outlook revision also reflects the recent collapse in the group’s market capitalization and deterioration in credit market confidence, which, if not restored through a credible debt-reduction plan and operational turnaround in

France, could result in higher funding costs in the medium term.

The report goes on to say the company’s debt rating could be downgraded if Altice fails to improve its French operations and/or the debt pile isn’t addressed. Conversely the outlook could be revised back to ‘stable’ as and when Altice starts turning things around.

Altice tries desperately to restore investor confidence

Embattled telecoms group Altice has been forced to issue a statement addressing recent market speculation as its shares have continued to dive.

Companies are generally reluctant to respond to ‘rumours and speculation’, but if that speculation results in a self-reinforcing downward spiral for its she price then exceptions have to be made.

In this case there had been growing fears that heavily-indebted Altice might not have enough ready-cash to handle its financial obligations and may therefore have to flog some shares. Such a fire-sale would presumably have to be done at a discount, which seems to have been one of the reasons for the price drop. The company also moved to deny that Next Alt, founder Patrick Drahi’s company that is the largest Altice shareholder, is selling Altice shares.

Here are the issues the Altice announcement addressed:

  • Altice is not in preparation of a cash raising by means of an equity- or equity-linked issuance and has no intention to pursue such action
  • Next Alt S.à.r.l. (“Next”) does not have any margin loan exposure to Altice and has not sold any material number of shares since the IPO
  • Management has not taken any active decision to sell Altice shares
  • Altice plans to de-lever its balance sheet and does not have margin loan exposure within the group

It’s all very well trying to put current rumours to bed but they were themselves the product of a sequence of events that had already contributed to Altice shares losing more than half of their value in the latter half of this year alone. So the rest of the Altice announcement sought to clarify its current strategy.

In a nutshell it all comes down to paying down some of the €50 billion or so of debt it has accumulated in the acquisition of companies like SFR and Cablevision. Central to this, of course, is not adding to it, so Altice promises not to go on any shopping sprees anytime soon. Other than that it needs to sort out SFR, where most of the numbers seems to be going in the wrong direction, and flog some ‘non-core’ assets such as its tower portfolio.

Of course it’s never a good sign when a company has to whack out an emergency announcement saying everything’s cool, but investors do seem to have derived some reassurance from this one – pushing shares back up a bit. Other than that all Altice can do is start delivering on all the promises made when it started its M&A frenzy four years ago and, as a consequence, pay down some of that debt.

Here’s a vid from happier times, when Altice IPOed on Euronext.

 

Altice share plunge costs CEO Combes his job

The share price of French telecoms group Altice has been going down the toilet, resulting in the departure of CEO Michel Combes.

The value of the company has been in steady decline since the middle of this year, but fell off a cliff last week following its Q3 earnings announcement, which revealed higher than expected churn at French mobile operator SFR and warned that group earnings are expected to grow at the lower end of its guidance range. The current public value of the company is less than half what it was in early August 2017.

It looked like the scapegoating had been concluded early when the SFR Deputy CEO Michel Paulin decided to quit ‘for personal reasons’ on 11 September, with Combes clinging on. Not for long, it turned out, with the owner of Altice – Patrick Drahi – apparently deciding that if you want something done properly you have to do it yourself.

“Michel has been an important part of the Altice story when he first joined the Board of Altice,” said Drahi. “He provided key support and judgment as we developed our expansion strategy. As CEO, Michel critically created the group structure to operate a transatlantic communications business while driving key technology, research and innovation initiatives, which will serve Altice for the future. I would like to personally thank him for his contribution, integrity, loyalty and friendship.” You’ve got a funny way of showing it Patrick.

“I would like to thank Patrick and the team for their confidence over the past years,” said Combes, who presumably got a tidy pay-off. “It has been a privilege to be part of the Altice story, accompany the expansion of the group and lead the industrialization of the convergence strategy. With Patrick returning as President of the group, Altice will be well positioned to execute its strategy across all operations.”

Combes had only been at Altice since the middle of 2015, having moved on from Alcatel-Lucent when it was acquired by Nokia. Within a year of joining as COO he was promoted to CEO, presumably because he’d done such a great job. The CEO role will be filled once more by his predecessor Dexter Goei, who has been heading up Altice’s US efforts, but the big change is that Drahi himself is returning to day-to-day management, with SFR at the top of his to-do list.

It looks like Drahi has his hands full. Altice has gone big on content acquisition, especially in France, but with subscriber numbers heading in the wrong direction it’s hard to view that as a success. Furthermore the group is sitting on a ton of debt from its M&A frenzy of recent years, leaving it especially vulnerable to macroeconomic fluctuations. It’s going to take more than a slick corporate rebrand to sort all that out.