Telecommunications consortium e& from the United Arab Emirates has sealed an agreement this week to acquire marquee majority shares in PPF Telecom Group’s telecommunication assets in specific European countries. The hefty €2.15 billion transaction includes a 50% purchase plus one share in telecom operations in Bulgaria, Hungary, Serbia, and Slovakia. This basket of assets notably covers Yettel and the operator units in Bulgaria, Serbia, and Hungary and O2 in Slovakia.
Moreover, e& will gain control over the local branches of PPF’s telecom infrastructure business, Cetin, transferred to PPF Telecom Group as a transaction premium. However, PPF’s Czech assets, including O2 and Cetin, have been deliberately filtered out of this deal.
Apart from the sizeable up-front investment, an additional contingency payout of €350 million is incorporated into the contract over the next 36 months. This payment is bound by the performance of PPF, predicated on a set of pre-agreed financial targets. Likewise, a claw back clause makes provision for a potential refund of €75 million to e&, should PPF underperform against these objectives.
With the reins of PPF Telecom’s CEO remaining in the hands of Balesh Sharma, PPF CEO Jiri Smejc reflected on the immense scale of the transaction. He accentuated the path of growth since PPF’s telecom businesses’ acquisition from Telenor in Bulgaria, Hungary, and Serbia. He further envisioned the alliance of PPF’s regional knowledge with the global outreach of e& offering promising opportunities for synergy and expansion.
This strategic surrender of a stake marks a pivotal shift in PPF’s focus. Having earlier announced a reduced emphasis on Asian investments, PPF now channels its energies towards its European markets. On the flip side, e& is broadening its international profile with its CEO Hatem Dowidar scouting for new ventures beyond domestic frontiers.
As the transaction closure looms in Q1 2024, e& envisions setting a solid footprint in Central and Eastern Europe. Combining PPF Telecom’s expertise with its innovative capabilities positions e& to achieve enhanced customer offerings and streamlined procurement efficiencies.
It is noteworthy to mention, e& has been consistently elevating its stake in Vodafone Group over the past year. It has achieved a 14.6% stake as of May, with rumors suggesting an additional increase by 20%. A formal strategic alliance between e& and Vodafone seeks to collaborate across Europe, Africa, and the Middle East, focusing on enterprise and technology.
Resonating with their commitment to new collaboration and investment opportunities, the pact with PPF Group exemplifies e&’s commitment to expanding its customer base and providing them with more sophisticated digital services, appealing to both consumers and enterprises. The duo aims to realize synergies, optimize procurement efficiencies and enhance customer offerings, cementing their position as a leading global tech group.
