Orange (AO) | Hold | Agreement to acquire SFR

Research evidence excerpt

Orange (AO) | Hold | Agreement to acquire SFR

News comment

Release date: 08 June 2026

Javier Borrachero, CFA

Head of Telecommunications Services

+34 914 36 5161

jborrachero@keplercheuvreux.com

HoldOrange

France | Telecom services Beta Profile: MCap: EUR46.4bn

Target Price: EUR18.00 Bloomberg: ORA FP Reuters: ORAN.PA

Current Price: EUR17.43 Free float 71%

Up/downside: 3.2% Avg. daily volume (EURm) 162.9

YTD abs performance 22.8% Market data: 05 June 2026

52-week high/low (EUR) 18.74/12.54

Agreement to acquire SFR

Key points:

The agreement is positive as it brings market consolidation closer. However, vs the previous offer, the price could be slightly

higher due to the earn-out, and the SFR EBITDA contribution is lower than we had expected.

In the case of Orange, they pay 27% of assets but only get 24% of EBITDA, and the quality of some customers is not the best

possible.

We had already priced in 70% chances; we estimate the deal could add c. EUR0.7 per share in the best case.

Details of the deal

Bouygues Telecom, Iliad and Orange (the “Consortium”) announced on Sunday the signing of a Memorandum of Understanding

with Altice France with a view to acquiring SFR.

The proposed transaction is based on a price equating to a total EV of EUR20.35bn for the Altice France assets subject to the

closing adjustments, which are 1) an earn-out payment of up to EUR0.65bn 2) a downward price adjustment and exit provisions

at the Consortium’s or Seller’s initiative (safety clause), depending on SFR’s financial performance up until the closing of the

transaction. 3) the usual adjustment mechanisms in relation to debt based on the closing accounts, 4) a price adjustment

mechanism relating to compliance with the Seller’s commitments up until the closing of the transaction (regulatory and