A consortium led by Bouygues Telecom has reached a memorandum of understanding to acquire French telecom operator SFR from billionaire Patrick Drahi for €20.35 billion. The agreement, announced on Saturday night, marks a significant move to reshape the French telecommunications market by reducing the number of major mobile operators from four to three.

The consortium, which includes Bouygues, Orange, and Free-Iliad—owned by Xavier Niel—plans to divide SFR’s mobile, broadband, and business operations among themselves. This marks the conclusion of a bidding process that began last summer, aimed at consolidating the French telecom sector. The offer matches the €20.4 billion bid submitted in April, an increase from an initial €17 billion proposal made in October as the consortium sought to persuade Drahi to sell the company he acquired in 2014.

The transaction remains subject to approval by regulatory authorities and is expected to provoke scrutiny from antitrust regulators in both Paris and Brussels. Traditionally, regulators have been cautious about mergers reducing market players from four to three, concerned about potential price increases for consumers due to diminished competition. However, sources suggest that French regulators may be more receptive to the deal than in the past, partly influenced by broader relaxations in European merger regulations announced earlier this year.

For Drahi, the sale represents a further step in his effort to reduce the substantial debt accumulated while building his telecom and media empire, estimated at around $60 billion over two decades. Last year, he reached an agreement to lower the debt of Altice France, the parent of SFR, from €24 billion to approximately €15.5 billion.

Under the proposed structure, Bouygues, Iliad, and Orange would distribute SFR’s consumer mobile and broadband customers among themselves, with Bouygues acquiring the division serving corporate clients. The consortium has also agreed on break-up fees ranging from €100 million up to €2 billion, contingent on the initiator, timing, and reasons for any termination of the deal.

The French government, which holds a stake in Orange, described the agreement as a “major step” with potential impacts on the French and European telecom industries. Economy Minister Roland Lescure stated the government will monitor the deal closely, emphasizing concerns about job preservation and the affordability of consumer subscriptions.

The consortium anticipates signing definitive legal agreements in the latter half of this year, with completion of the transaction projected for the second half of 2027.