Confirmed: Xavier Niel’s NJJ-led consortium agrees to acquire Eir

20 Dec 20171.34k Views

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Eir offices in Dublin. Image: Luke Maxwell

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French billionaire to take charge of Ireland’s incumbent telecoms operator.

A consortium led by French billionaire Xavier Niel has been confirmed as the new majority owner of Irish telecoms incumbent Eir.

As we reported this morning (20 December), Niel had been rumoured to be close to an agreement with the operator’s shareholders last night.

‘We want to invest for the future of Ireland, and hope to work closely with the Irish Government and ComReg to ensure that people across the country have access to world-class, superfast fixed and mobile broadband’
– XAVIER NIEL

According to Eir, a consortium led by NJJ Telecom Europe, the private investment firm of Niel, alongside his French operator Iliad, has agreed to acquire a majority stake in Eir at an enterprise value of around €3.5bn.

The acquisition is conditional upon the satisfaction of certain conditions, including obtaining EU Commission Competition clearance, media merger consent from the Minister for Communications, Climate Action and Environment in Ireland, and Broadcasting Authority of Ireland consent.

The transaction is expected to be complete in the first half of 2018.

Current CEO Richard Moat – the mastermind of Eir’s transformation from a technology laggard to a fibre champion – has announced his intention to step down as chief executive officer upon the completion of the transaction.

The new owner of Eir

NJJ will own a 32.9pc stake in Eir while Iliad, which Niel founded and which is listed on the Paris Stock Exchange, will own 31.6pc. Effectively, the two entities largely controlled by Niel will own 64.5pc of Eir.

Eir is currently owned by an investor group including Anchorage Capital Group, Davidson Kempner Capital Management and GIC. Shareholders Anchorage Capital and Davidson Kempner will retain a combined 35.5pc share in the company, at 26.6pc and 8.9pc, respectively.

Iliad is the parent of Free, a telecoms operator in France that has 13.4m mobile and 6.5m broadband subscribers. Iliad has a market capitalisation of nearly €12bn as of December 2017.

Niel has a net worth estimated at €8.3bn and is also the co-owner of French newspaper Le Monde. As well as his majority stake (52pc) in Iliad, Niel also has a controlling stake in Monaco Telecom.

Eir, the national telecoms operator of Ireland, had revenue of €1.3bn and EBITDA (earnings before interest, taxation, depreciation and amortisation) earnings of €520m in the financial year to 30 June 2017.

“Eir is an essential part of the Irish economy and we have closely followed its transformation over the last five years through the excellent work of its team,” said Niel.

“We are a long-term investor in the telecoms sector and bring global knowhow to Eir. In our businesses in France, Monaco and Switzerland, we have consistently delivered investment in infrastructure, while driving down prices for consumers.

“We are delighted to partner with Anchorage Capital and Davidson Kempner, and are looking forward to working with the talented Eir team to bring more innovation and choice to Irish consumers. We want to invest for the future of Ireland, and hope to work closely with the Irish Government and ComReg to ensure that people across the country have access to world-class, superfast fixed and mobile broadband,” Niel said.

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com