e& and PPF Group (PPF) have recently signed a binding agreement, bringing exciting changes to the telecom industry. e& will acquire a controlling stake (50% + 1 share economic stake) in PPF Telecom Group’s (PPF telecom division’s) assets across Bulgaria, Hungary, Serbia and Slovakia.
The deal encompasses significant entities, namely Yettel Bulgaria, Yettel Hungary, Yettel Serbia and O2 Slovakia operations, as well as the CETIN and O2 Networks infrastructure businesses operating in these countries.
The upfront acquisition value stands at €2.150 billion, with the potential for additional earn-out payments to PPF amounting to €350 million if certain financial targets are surpassed within the three-year period post-closing. However, if these targets are not achieved, a claw-back provision will be enforced.
It's worth noting that PPF Telecom’s infrastructure businesses in the abovementioned countries are fully independent and not tied to the service companies' operations.
e& and PPF have ambitious plans for synergies between the two groups, aiming to realize substantial OPEX and CAPEX savings. Additionally, the collaboration presents numerous opportunities for introducing e&'s cutting-edge B2B and B2C digital products in Central and Eastern Europe (CEE).
The continuity of operations is guaranteed as they retain Balesh Sharma, the current CEO of PPF Telecom. His expertise, along with the dedication of PPF Telecom's teams in their respective markets, will be leveraged for mutual success. Ensuring stability, both companies are committed to maintaining PPF Telecom's current rating level even after the transaction is completed.
Commenting on the strategic expansion into the European market, H.E. Jassem Mohamed Obaid Bu Ataba Alzaabi, chairman, e&, said: “With this move, we join forces with PPF to build and expand our international footprint in the attractive Central and Eastern Europe region and beyond. It is the next step of our transformation into a global technology group, offering e& multiple avenues to roll out its leading suite of B2B and B2C digital products in the CEE with significant synergies.
The acquisition aligns with e&’s strategic ambition to accelerate international growth and diversify geographically. This represents an unparalleled opportunity to establish a strong presence and foster development within the dynamic CEE region. The PPF Telecom portfolio, spanning four countries, exhibits a well-balanced structure underpinned by robust macroeconomic fundamentals and stable currencies. The countries of its operations are characterised by regulatory stability, healthy competition, and highly attractive returns, positioning them among the most promising in Europe,” explained Alzaabi.
e& is expected to consolidate more than 10 million subscribers from this acquisition once it is closed, with the acquisition being under e& international, the telecom vertical of e& in global markets.
In relation to the European context, the UAE operator’s cooperation with UK telecom giant Vodafone is also confirmed to be awaiting regulatory approvals, paving the way for increasing its current stake of 14.6% to 20%, as per e& CEO Hatem Dowidar.