Hungary’s largest fixed and mobile operator Magyar Telekom confirms on its website that it has signed a share purchase agreement to transfer its 76.53% stake in Montenegro’s dominant full-service provider Crnogorski Telekom (CT) to Croatian incumbent Hrvatski Telekom (T-Hrvatski Telekom [T-HT]) for a total consideration of EUR123.5 million (USD130.7 million). The transaction is expected to close by the end of January 2017. Magyar Telekom and T-HT are sister companies in the Deutsche Telekom (DT) group.
Magyar Telekom adds that the disposal of the CT stake is in line with its renewed focus on its Hungarian operations, ‘where efforts are underway to further strengthen the company’s position in the mobile market and its ICT capabilities, alongside maintaining investment in fixed networks and raising penetration levels in those areas already served by high speed internet access.’ In addition, the deal is aimed at reducing Magyar Telekom’s net debt ratio from 41.6% (end-September 2016) to a targeted range of 30%-40% by end-March 2017.
In the first nine months of 2016 CT generated revenues of EUR69.4 million and EBITDA of EUR24 million. At the end of September CT held around 80% of the Montenegrin fixed broadband subscriber market and over 90% of the fixed line voice segment, whilst it had a 32.7% mobile user share – in second place behind Telenor Montenegro – at the same date, although it claims a market-leading position in the post-paid mobile sub-segment.
New owner-to-be T-HT announced on its website that the transaction is part of the Croatian group’s strategy of growth through expansion into regional markets. Davor Tomaskovic, President of the Management Board of Hrvatski Telekom, stated: ‘With the acquisition of Crnogorski Telekom, we expect substantial synergies between Hrvatski Telekom and Crnogorski Telekom, first of all through the transfer of knowledge and technology, as well the optimisation of business processes and joint market presence.’ After the transaction has completed, the remaining 23.47% of shares not held by T-HT will continue to be owned by individuals and legal entities, T-HT’s statement read, adding: ‘The financial and management consolidation of CT is planned to commence after the transaction has closed.’