Altice separates US arm in business revamp - Mobile World Live

Altice separates US arm in business revamp

09 JAN 2018

Debt-laden Altice detailed plans to spin-off its US business and create a new structure for its struggling European operations, in a company-wide shake-up intended to help curb a recent slump in performance.

The telecoms and cable group, which struck deals across the US, France, Portugal and Israel in recent years to boost its presence, experienced a drop in its share price in recent months largely due to declines in Europe.

Weakness in France and Portugal, revealed in its Q3 results, saw the company’s stock drop by a third and it is also carrying a debt load of around €50 billion.

Plans to overhaul the group follows an announcement in November, which saw the company shake-up its management and governance, with founder Patrick Drahi reasserting his power over the group. Michel Combes, CEO, also left the company: just last week he was announced as the new CFO of US operator Sprint.

Altice Europe and US spin-off
As part of the most recent reorganisation, Altice said in a statement it would separate Altice USA by spinning off its 67.2 per cent holding in the unit to existing shareholders.

Altice USA went public in June 2017, around two years after it was formed through the acquisition and merger of cable operators Cablevision and Suddenlink Communications in the country.

Drahi will remain in control of the group overall, serving as the chairman of Altice USA and president of the board of Altice, which in turn will be renamed Altice Europe.

As part of the separation, Altice USA directors also agreed in principle to the payment of $1.5 billion in dividends to shareholders, expected to be shown in the company’s Q2 2018 results, in addition to a share repurchase programme of $2 billion, following the completion of the separation expected in the second quarter.

The newly-formed Altice Europe will comprise Altice France, Altice International (including operations in Dominican Republic, Portugal and Israel) and a new Altice pay-TV subsidiary, with the move made “in the spirit of enhanced accountability and transparency”.

Altice said the new unit will integrate its support services businesses into their respective markets and bundle Europe’s premium content activities into one separately funded operating unit with its own P&L.

Dennis Okhuijsen, group CFO, was named CEO of Altice Europe, while Dexter Goei will continue to serve as CEO and director of Altice USA. Both will report to Drahi.

Speaking to Financial Times, Goei acknowledged the internal revamp had become a necessity: “I think I’ve got so many different hats on right now, I’m not sure where I live. It’s clear that focusing my time and Dennis’s time on specific jurisdictions is critical,” he said.

The restructure also sees the company backtrack from plans announced in May 2017, when it said it would group its business units – including US operations – under a single name at the start of 2018, as part of a unified global strategy.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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