August 2 (SeeNews) - Netherlands-headquartered investment firm PPF Group NV said it agreed to divest a stake of 50% plus one share in its telecoms assets in Bulgaria, Hungary, Serbia and Slovakia to Abu Dhabi-based Emirates Telecommunication Group Company, known as Etisalat by e&, for up to 2.5 billion euro ($2.7 billion) including earnout.
The buyer will pay 2.15 billion euro upfront, with an additional earnout of up to 350 million euro due if pre-agreed financial targets are met within three years of closing, PPF Group, the indirect shareholder of PPF Telecom Group, said in a press release late on Tuesday. As much as 75 million euro is subject to a clawback if the targets are not met.
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PPF Group owns mobile operator Yettel in Bulgaria, Serbia and Hungary and O2 in Slovakia as well as the local units of telecoms infrastructure provider Cetin, which will be transferred to PPF Telecom Group. The vendor's telecoms assets in the Czech Republic, including O2 and Cetin, will not be part of the transaction. Instead, PPF Group will retain its full indirect ownership by spinning them out of PPF Telecom Group.
"The purchase price of up to 2.5 billion euro, including contractual earn-out payments, represents one of the largest ever deals for PPF," its CEO Jiri Smejc said. He added that PPF's know-how in the region and e&'s global scale can unlock joint synergies and further growth.
The transaction, which is subject to regulatory approvals and other customary closing conditions, is set to be completed in or before the first quarter of 2024. The deal will likely need to undergo a review under the EU's Foreign Subsidies Regulation.
PPF and e& plan to establish together a major telecoms business in CEE, according to the statement. The two partnering groups are eyeing significant synergies in procurement efficiencies, and wholesale and roaming arrangements. PPF Telecom will use the Emirati company's know-how to roll-out digital, IoT and B2B services, enhance customer offerings and open cross-continent career development opportunities for employees.
PPF Group paid 2.8 billion euro in 2018 to acquire Telenor's telecoms assets in Bulgaria, Hungary and Serbia, together with the Montenegro business which it sold in 2021 to Hungary’s 4iG Nyrt. Telenor was rebranded to Yettel in 2022.
e& operates in 16 countries in the Middle East, Asia, and Africa. The company booked consolidated net profit of 10 billion Emirati dirham ($2.7 billion/2.5 billion euro) on revenue of 52.4 billion dirham in 2022.
($ = 0.9098 euro)