Emirates Telecommunications Group Company (e&) took a big step towards its strategic ambition to accelerate international growth and diversify into new geographies when the UAE telecom giant agreed to acquire a controlling stake (50% + 1 economic share) in PPF Telecom.
The total value of the deal is €2,150 million ($2.36 billion). Upon closing the transaction, e& will fully consolidate the acquired assets under its international vertical, the company submitted in a filing with the Abu Dhabi Securities Exchange (ADX).
The financial impact of the transaction represents an incremental of approximately 14 percent and 11 percent of e&’s total revenues and EBITDA based on FY 2022 financials. It would mean that e&’s telecom portfolio will increase to 20 countries.
The agreement was signed with the PPF Group, which owns PPF Telecom’s assets in Bulgaria, Hungary, Serbia, and Slovakia and helps expand e&’s reach and business in central and eastern Europe.
PPF Telecom serves more than 10 million customers and enjoys leading positions in its markets. It owns Yettel Bulgaria, Yettel Hungary, Yettel Serbia, and the O2 Slovakia service operations as well as the CETIN and O2 Networks infrastructure businesses in these countries that are fully carved out and managed independently of the service companies.
The company’s combined revenues and EBITDA were €1.8 billion ($1.98 billion) and €0.7 billion ($770 million) respectively in 2022.
e& acquires PPF Telecom for CEE presence
In a statement, e& said: “This acquisition is an unparalleled opportunity to establish a strong presence and foster developments within the CEE region. PPF Telecom, spanning four countries, exhibits a well-balanced structure, underpinned by robust macroeconomic fundamentals, as well as stable currencies.
“The markets of its operations are characterised by stable regulatory environments, healthy competition, and attractive returns. The transaction also enables e& and PPF, the leading investor in the region, to potentially partner on further expansion opportunities.”
The transaction is also subject to up to €350 million ($384.2 million) in earn-out payments if PPF Telecom exceeds certain financial targets within the three-year period after closing. It is also subject to a claw back of up to €75 million ($82.35 million) if such financial targets are not achieved.
In addition, PPF has a put option for its remaining stake in PPF Telecom exercisable five years after closing and e& would have a reciprocal call option. Regulatory approvals and certain closing conditions have to be met for closing of the transaction.
Follow us on
