Vodafone Group agreed on the sale of its Hungarian unit to local operator 4iG and government holding company Corvinus for HUF715 billion (US$1.8bn), a continuation of the group’s divestment strategy to focus on core markets and cut debt.
Vodafone said in a statement the combination of 4iG and Vodafone Hungary will “create a clear number two operator across mobile and fixed communications with broader ICT capabilities.
The combination with 4iG is “complementary” with “limited overlaps” in operations and infrastructure to create a “stronger competitor to the incumbent operator.” The Hungarian market is currently being led by Deutsche Telekom subsidiary Magyar Telekom.
The sale price is over nine times of Vodafone Hungary’s adjusted EBITDA in the 12-month period ending March. The group’s shared services business Vodafone Intelligent Solutions (VOIS) is not included in this sale and will continue to supply other operators.
The sale is subject to regulatory approval, due diligence and all parties entering a binding agreement. The deal is expected to be completed by the end of this year.
In a statement, CEO Nick Read said: “The Hungarian Government has a clear strategy to build a Hungarian-owned national champion in the ICT sector. This combination with 4iG will allow Vodafone Hungary, which has a proud history of success and innovation in the country, to play a major role in the future growth and development of the sector as a much stronger scaled and fully converged operator.
"The combined entity will increase competition and have greater access to investment to further the digitalisation of Hungary.”