The transaction, expected to close by the end-2022, subject to due diligence and regulatory approval, will give 4iG 51% in Vodafone Magyarorszag and the state a 49% stake.
"The combination of 4iG and Vodafone is a significant step towards building a Hungarian-owned national champion in the ICT sector," 4iG said in a statement.
Chairman-CEO
4iG already holds 25% of Hungary’s third-largest mobile operator
Over the years, 4iG has grown from a small IT company to an ICT giant through a string of acquisitions in
Economic and Development Minister
The acquisition will create the conditions for the establishment of a nationally-owned leading player in the ICT market that can "contribute to improving the competitiveness of the country, in line with the digital challenges of the 21st century", while providing "outstanding quality service" to its close to 4mn retail and corporate subscribers, he added.
Nagy noted that the government had set goals after coming to power in 2010 to boost domestic ownership in strategic sectors to over 50% and those targets had already been achieved in the banking, energy and media sectors.
Vodafone said the combination with 4iG is complementary, with limited overlaps. The addition of the company’s infrastructure to the 4iG group will create a stronger competitor to the incumbent operator,
Vodafone, with a headcount of 3,000, was the first company in
The price tag paid for Vodafone’s Hungarian unit roughly equals the sum of money the government plans to collect from windfall taxes to fill in the budget gap, which hit 84% of the full-year target by July. These windfall taxes also hit the telecom sector, souring the market for investors.
The
The enterprise value of the transaction is 7.7 times the Ebitda of Hungary’s second-largest mobile operator, which closed its 2021/22 business year with HUF278bn revenue.
Opposition parties criticised the deal, saying the government should focus on helping households with higher energy bills at the time of crisis or use funds to raise wages for teachers.
There could be question marks over the financing of the deal, local media notes. 4iG is heavily indebted and it could be risky for local banks to extend credit to the company, with HUF537bn in debt standing against HUF149bn equity. 4iG did not respond to queries over the issue.
4iG share price jumped 10.5% to a seven-month high of HUF860 on the
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