Orange picks up USD.1.4 from sale of Dominican Unit to Altice
France's biggest phone company Orange SA is to exit from its Dominican Republic unit, Orange Dominicana SA. The company has sold its Dominican business to cable and telecommunications investor Altice for USD1.4 billion. The acquisition will entail the sale of the Orange brand.
Established in 2000, Orange Dominicana SA grew into a company with a 3.4 million subscriber base. Last year, it posted USD581 million in sales. The offer of Altice put the value of Orange's Dominican Republic unit at around 2.4 times its yearly revenue. According to data collected by Bloomberg, the median offer for 40 telecommunications acquisitions worth more than USD500 million in 2013 was 1.83 times its yearly sales.
Orange saud about the sale of its Dominican Republic unit, "(The Dominican sale is a) significant step forward in the optimization of Orange's assets portfolio."
In a statement yesterday, Altice said the acquisition of Orange Dominicana SA is subject to approval from local authorities and regulators, and that the board of directors of Orange will be considering the transaction in the week that begins December 9.
Paris-based Orange had put up its Dominican Republic unit for sale this year, and said the auction garnered interest from various firms. The Luxembourg-based company founded by telecommunications entrepreneur Patrick Drahi had agreed to acquire Tricom SA and Global Interlink Ltd in order to expand its media empire in the Caribbean, which includes television, Internet and telephone packages and wireless business segments.
Altice also added that it was also making arrangements to finalize its partnership agreement on its investments in the telecommunication industry with Grupo Leon Jimenes in the Dominican Republic.
Bloomberg noted that European telecommunications companies had been disposing peripheral assets in order to reduce debt while making significant investments in high-speed mobile networks that will cater in their biggest markets. Just last week, Deutsche Telekom AG recommended the sale of its 70% ownership interest in its digital-classifieds business Scout24 Holding.