Vodafone to Sell Vodafone Hungary for 1.7 Billion Euros

The acquisition of Vodafone Hungary could also significantly reshape the telecom market in Hungary, enabling the 4iG Group to play a leading role in the digital transformation of the Hungarian economy. The transaction announced is particularly important in various respects in the history of Hungarian telecommunications.

Highlights

  • Vodafone Sells Hungarian unit to 4iG and Hungarian state.
  • The financial closing of the transaction is expected on 31 January.
  • Vodafone says proceeds from the sale are intended to be used for deleveraging.

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Vodafone to Sell Vodafone Hungary for 1.7 Billion Euros

Antenna Hungaria, a subsidiary of Hungarian telecoms and IT Group 4iG, Corvinus International Investment (acting for the Hungarian State), and Vodafone Group have announced the signing of a binding sale and purchase agreement for 100 per cent of Vodafone Hungary operations. The transaction announced is of particular importance in various respects in the history of Hungarian telecommunications.

Sale Transaction

The parties have agreed on an Enterprise Value of HUF 660 billion, which is 7.1 times the EBITDA of the target company for the financial year ending as of March 31 2022. Under the terms of the agreement, 4iG Group will acquire a 51% controlling stake through its subsidiary Antenna Hungaria, while the Hungarian State will acquire a 49% indirect stake in Vodafone Hungary, the second largest player in the Hungarian market. The transaction is expected to close on January 31, 2023.

Also ReadVodafone Idea: 2023 Will Be the Year of Make or Break for the Telco

Gellert Jaszai, Chairman of 4iG Nyrt, commented on the transaction: "The acquisition of Vodafone Hungary opens a new chapter in the Hungarian telecommunications market. It is the first info-communications group in almost thirty years that can operate as a Hungarian majority-owned convergent operator."

"The strategic cooperation between the Hungarian state and 4iG in this transaction will not only transform the market but also improve competitiveness and accelerate the digital transformation of the economy", stressed the Chairman of the Group.

Vodafone Hungary Assets

Vodafone was the first company in Hungary to offer 5G services to its subscribers. With this transaction, 4iG and the Hungarian state will acquire Vodafone Hungary's mobile spectrum, active radio transmission equipment, active antennas and cables, part of the outdoor cabinets, and the uplink and optical network serving the towers.

Hungarian Telecom Landscape Post Acquisition

The acquisition of Vodafone Hungary could also significantly reshape the telecom market in Hungary, and the state-of-the-art solutions and innovative technologies will enable 4iG Group to play a leading role in the digital transformation of the Hungarian economy.

On transaction closure, the combined portfolio of 4iG Group (DigiMobil) and Vodafone will be the second largest in the mobile voice and internet services market, which is the largest revenue generator. In addition, due to the acquisition, 4iG secures the market leader position in fixed-line internet services and will also become a market leader in the television broadcasting market.

Read More - Vodafone Idea Continues Its 12 Month Long Subscriber Losing Streak: TRAI

Regarding the sale, Margherita Della Valle, Vodafone Group's interim Chief Executive, said: "This combination establishes a scaled converged operator across mobile and fixed communications and supports the Hungarian government's goal of creating a national Information and Communications Technology champion. The combined entity will increase competition and accelerate investment in the ongoing digitalisation of Hungary."

British telecom group Vodafone said it had agreed to sell its Hungarian business to local IT company 4iG and the Hungarian state and would receive a total cash consideration of 1.7 billion euros ($ 1.82 billion) from the deal. Proceeds from the sale are intended to be used for deleveraging. The sale, first announced in August, comes as Vodafone looks for a new chief executive after Nick Read stepped down as the group's CEO.

Reported By

Aparna, from a journalism background, closely follows the developments in the telecom Industry.

Aviation and Fintech News

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