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4iG agrees USD1.8bn takeover deal for Vodafone Hungary

22 Aug 2022

Hungarian IT and telecoms group 4iG, together with the Hungarian State, have entered into ‘non-binding heads of terms’ with the UK’s Vodafone Group to acquire a 100% stake in fixed and mobile network operator Vodafone Hungary for a total cash consideration equivalent to an enterprise value of HUF715 billion (USD1.77 billion). As announced today on the Budapest Stock Exchange, the proposed acquisition would see 4iG take a controlling 51% stake in Vodafone Hungary, with the other 49% falling under state ownership via investment company Corvinus. The announced enterprise value represents a multiple of 7.7x EBITDA for the twelve months ending 31 March 2022. The planned transaction is expected to close by the end of 2022, subject to confirmatory due diligence, finalising binding transaction documentation and obtaining necessary regulatory approvals.

The announcement highlighted that the takeover of Vodafone Hungary – with around five million mobile, fixed broadband, pay-TV and fixed voice revenue generating units (RGUs) as of mid-2022 – would give the 4iG group a consolidated total of roughly 7.6 million Hungarian RGUs, while creating ‘significant potential for further growth through cross-selling opportunities, full fixed-to-mobile convergence and scale, resulting in major B2B and B2C revenue synergies.’ The ‘net present value’ of the merger’s combined revenue, cost and CAPEX saving synergies was estimated at above HUF150 billion.

4iG CEO Gellert Jaszai declared: ‘The acquisition of Vodafone Hungary will be the most significant domestic telco transaction in the last 30 years, of a similar extent to the privatisation of Matav [now Magyar Telekom, the market leader] after the regime change. The acquisition will create a predominantly Hungarian-owned group of infocommunications companies and a clear number two operator in the Hungarian market.’

Previously, 4iG completed the purchase of quadruple-play operator DIGI Hungary and subsidiaries Invitel, DIGI Infrastruktura and i-TV in January 2022, and three months later it completed its majority takeover of the formerly state-controlled infrastructure operator Antenna Hungaria, with the state retaining a minority stake in the enlarged group. Other Hungarian companies under 4iG/Antenna Hungaria ownership include Invitech, Hungaro DigiTel and AH Net (formerly MVM Net), while the group holds a 25% stake in mobile operator Yettel Hungary and the latter’s infrastructure associate CETIN Hungary. Internationally, the group controls cellco One Montenegro and twin Albanian operators ALBtelecom and ONE Telecommunications (formerly Telekom Albania).

TeleGeography’s GlobalComms Database shows that 4iG’s latest target company Vodafone Hungary competes closely with Yettel for the position of second largest Hungarian mobile operator by subscriptions, behind Magyar Telekom. Similarly in the fixed broadband market, Vodafone sits behind Magyar Telekom and narrowly in front of DIGI in subscription volume terms as of mid-2022. Vodafone took over the country’s then-largest cable broadband/TV operator UPC Hungary in July 2019.

Hungary, 4iG, DIGI (Hungary), Vodafone Group, Vodafone Hungary

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