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British telecom Vodafone Group plc has announced that it has agreed to sell its Hungarian business for a sum of €1.8 billion to create Hungary's second-largest telecom operator.
Vodafone said that it has entered into a non-binding agreement with the buyers- Local company 4iG & state-owned Corvinus Zrt. The deal will not include Vodafone's IT and Business Support venture VIOS.
The deal is valued at 715 billion forints (€1.8 billion). Hungarian PM Viktor Orban's government will hold 49% of the business while 4iG, the local IT and telecom, will hold 51%. Details regarding the financing of the deal have not been disclosed but it is expected that the deal will close by the end of 2022.
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According to Vodafone Chief Executive Nick Read, this transaction would give Vodafone Hungary an opportunity to play a major role in the future growth and development of the sector as a stronger operator.
He also added that the combined entity would have greater access to invest in the digitalization of Hungary. Moreover, this transaction is also in line with the Hungarian government's goal of forming a national champion in the IT and Communications sector.
A government spokesperson has stated that the assets acquired in the transaction will be labeled as strategically important, indicating that the purchase will not be facing regulatory scrutiny.
This is a beneficial transaction for Vodafone Group as the company has been restructuring itself for years. The proceeds of the transaction will be used by the entity to deleverage its balance sheet or repay debt. The company had sold its Malta, Qatar, and New Zealand business, representing the company's aim to simplify the business and focus on core markets.
Article by Aman Agarwal.
This story is brought to you in association with Jobaaj.com
