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Altice Europe's SFR FTTH unit to buy French company Covage for $1.1 billion

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By Reuters

PARIS (Reuters) – Debt-ridden telecoms and cable company Altice Europe <ATCA.AS> said on Monday its SFRFTTH unit will acquire French fibre wholesale operator Covage for around 1 billion euros ($1.1 billion), expanding the range of its fibre network business.

Altice Europe said the deal, expected to close in the first half of 2020, would result in SFRFTTH and Covage massively deploying fibre networks over the next three to four years.

The acquisition will be financed with 70 million euros worth of non-recourse debt, 465 million euros of cash equity to be contributed by Altice and 465 million euros of cash equity to be contributed by SFRFTTH’s financial investors.

“We are in advanced discussions with several parties in relation to our Portuguese fibre asset. This process is supported by the significant appetite for fibre in Europe, clearly demonstrated by the present transaction which has been strongly supported by our financial partners in SFRFTTH,” company founder Patrick Drahi said on Monday.

Altice Europe has been cutting down its large debt burden, and Drahi said this process was still underway.

“We continue to be focused on deleveraging Altice Europe notably thanks to growing revenue and EBITDA (earnings before interest, tax, depreciation and amortisation), which will be supplemented with disposal proceeds,” Drahi said.

(Reporting by Sudip Kar-Gupta; Editing by Tom Hogue and Sherry Jacob-Phillips)