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The deal will see the UAE-based operator group continue to expand its global portfolio, just months after CEO Hatem Dowidar said the company had the “capacity and wallet” for international expansion
This week, Emirati telecoms group e& has announced that it has agreed to buy 50% plus one share in PPF Telecom Group’s telecoms assets in Bulgaria, Hungary, Serbia, and Slovakia for €2.15 billion.
The assets in question include the operator units of Yettel in Bulgaria, Serbia, and Hungary, as well as O2 in Slovakia.
The deal also includes the local units of PPF’s telecoms infrastructure business Cetin, all of are being transferred to PPF Telecom Group as part of the transaction.
PPF’s Czech assets (both its telco unit O2 and the Czech unit of Cetin) are notably excluded.
In addition to the €2.15 billion up-front payment for these assets, the deal will also include up to €350 million in earn-out payments over the next three years, payable if PPF exceeds certain targets. Similarly, a claw back clause is in place that will see PPF return up to €75 million if the company fails to reach preset goals.
PPF Telecom’s CEO, Balesh Sharmaand, is expected to retain his position.
“The purchase price of up to €2.5 billion, including contractual earn-out payments, represents one of the largest ever deals for PPF. I am proud of how we have managed to grow the value of this asset since its purchase,” said PPF CEO Jiri Smejc, noting that PF had acquired the telco businesses in Bulgaria, Hungary, and Serbia as part of a group deal with Telenor back in 2018. “I believe that the know-how and experience that PPF has in the region, combined with the global scale of our partner, will enable us to jointly share ambitions for synergies and further growth”.
For PPF this stake sale is in line with their recently announced strategic shift, with the company saying earlier this year that they would reduce their focus on Asian investments to focus on their European markets.
In contrast, e& is currently expanding their international portfolio, with CEO Dowidar targeting new opportunities in Europe and beyond for a number of months now.
“As e& continues on its path to be a leading global technology group, our priority remains focused on expanding our customer base and providing them with more digital services, both for consumers and enterprises. This exciting partnership with PPF Group in Bulgaria, Hungary, Serbia, and Slovakia exemplifies our commitment to seeking new opportunities for collaboration and investment opportunities that will further accelerate our expansion,” said e&’s group CEO Hatem Dowidar.
“By combining PPF Telecom’s expertise with our own innovative capabilities, we are poised to establish a major telecommunications presence in Central and Eastern Europe. We aim to realise synergies, optimise procurement efficiencies, and enhance customer offerings, establishing our position as a leading global tech group”.
The deal is expected to close in Q1 2024, subject to regulatory approval.
In related news, e& has repeatedly grown its stake in Vodafone Group over the past year, increasing it to 14.6% in May, with further reports today suggesting the company aims to increase its stake by an additional 20%. They also announced a formal strategic partnership between the two companies, seeking to work together in on enterprise and technology across Europe, Africa, and the Middle East.
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