French M&A displays optimism

A number of big-ticket deals in high-growth sectors such as telecommunications and renewables signal a bright future for French dealmaking

French dealmaking witnessed an impressive recovery throughout 2020—finishing the year on a high. A total of US$41.4 billion in deals were announced in Q4 2020, up 17% year on year and the highest Q4 value on record. Deal volume also rallied towards the end of the year despite the impact of the global COVID-19 outbreak, with 227 announced deals in Q4 marking a return to pre-pandemic levels of activity. 

The first quarter of 2021 remained close in volume, with a total of 188 deals with an aggregate value of US$24.8 million. A number of significant deals in fast-growing sectors signal a return in confidence to the French M&A market.

Telco deals power ahead

Digital infrastructure assets such as towers operators have become a major growth area in pandemic times. Consumers are increasingly relying on and expecting efficient broadband coverage, accelerating an existing trend of telecoms firms carving out their infrastructure assets.

The largest French deal of the quarter was an example of this trend: Spanish telecoms infrastructure provider Cellnex’s acquired French towers firm Hivory for US$6.3 billion. The deal will see Cellnex take ownership of Hivory’s 10,500 towers across France and invest a further €900 million to build 2,500 new sites by 2029. Hivory was created as a joint venture in 2018 between PE firm KKR and French telco Altice to hold the latter’s portfolio of towers.

Another significant deal to take place in the first quarter was Orange’s US$1.6 billion sale of a 50% equity interest in Orange Concessions, its fiber-to-the-home (FTTH) network in rural areas, to CNP Assurances SA, EDF Invest and Banque des Territoires. The investment will support Orange’s rollout of essential infrastructure in low-density areas to address France’s “digital divide.” The deal is in line with France’s National Superfast Broadband Plan, aiming to extend optical fiber to subscribers throughout the country by 2025.

Many other deals have been announced since then in the sector, in particular Swiss Life Asset Managers’ investment in Altitude Infra THD and the acquisition by the latter of Covage fiber network assets.

Banking and insurance look to streamline

While telecommunications providers attracted some big-ticket deals in Q1 2020, it was the financial services sector that posted the highest deal value across all sectors. A total of 13 deals worth US$8.7 billion took place within the sector—the highest quarterly deal value since 2016.

The largest was French banking group BPCE’s US$4.5 billion buyout of its investment banking subsidiary Natixis, announced in February. The deal, which will see BCPE delist Natixis and restructure its activities, comes at a time when lenders are facing low interest rates along with the negative economic impact of the COVID-19 pandemic.

The insurance sector also saw some notable deals within the first quarter. The largest of these was London insurer Aviva’s US$3.9 billion sale of Aviva France to mutual insurer Aéma Groupe. The purchase of Aviva’s French operations, which includes its life, general insurance, and asset management businesses along with a 75% shareholding in French wealth manager Union Financière de France (UFF), is expected to propel Aema Group to a top-five position in France’s insurance market.

In a deal which highlights the ongoing digitization of France’s insurance market, private equity firm Activa Capital and public investment bank Bpifrance sold their stakes in insurance broker and online marketplace Active Assurances to Meilleurtaux, the French insurance brokerage and services provider.

Through the acquisition, Meilleurtaux will be able to offer its customers a suite of new services—from comparison to the sale and management of car and health insurance policies. Many other transactions have taken place in the insurance brokerage sector, such as Eurazeo’s investment in Groupe Premium or BlackFin Capital Partners’ Investment in CAFPI.

Renewables dealmaking gathers pace

The shift toward clean energy sources is encouraging dealmaking within France’s energy sector. Total Quadran, French renewable electricity production subsidiary of oil and gas major Total, announced in February that it had divested a 50% stake in its 338 MW renewable portfolio to Credit Agricole Assurances and Banque des Territoires for an enterprise value of US$600 million.

The purchase was structured in two separate transactions: In the first, Total Quadran sold a 50% stake in a 285MW renewable portfolio to French insurance firm Crédit Agricole Assurances. In the second, the renewables producer sold a 50% stake in a 53MW solar portfolio to French banking group Banque des Territoires. The deals highlight Total’s aim to de-risk its portfolio and achieve a return on equity, along with Credit Agricole and Banque des Territoires’ commitment a low carbon economy.

Offshore wind is another renewable energy source which is attracting investor attention. The industry will require significant investment if it is to meet the French government’s recently increased target of 5.2-6.2 GW of offshore wind in operation by 2028.

In February, Norwegian floating production storage operator BW Offshore acquired Ideol—a company engaged in construction and operation of offshore wind farms—for US$72.8 million. The newly created company, BW Ideol, aims to develop offshore power production solutions to drive the energy transition at a global scale.


While French dealmaking remained behind pre-pandemic levels in the first quarter both in terms of value and volume, some significant deals in high-growth sectors—such as telecommunications and renewables—are a promising sign of things to come. Other industries hit hard by the pandemic, such as banking, will use M&A as a tool to rationalize and streamline operations while positioning themselves for a post-pandemic future.

France’s macroeconomic outlook for the second half of 2021 is very encouraging, with the economy expected to see GDP grow more than that of its European neighbors. As France’s vaccine rollout gathers pace and COVID-19 restrictions are gradually lifted across the country, there is reason for dealmakers to be hopeful as they look ahead to the remainder of the year.

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