HomeAccesse& acquires majority stake in PPF Group’s CEE telco assets 

    e& acquires majority stake in PPF Group’s CEE telco assets 


    The UAE telco group has agreed to buy a 50% plus one share in PPF Telecom’s assets in Bulgaria, Hungary, Serbia and Slovakia 

    e& is seeking to build a major telecommunications business in central and eastern Europe after acquiring a stake of 50% plus one share in PPF Telecom Group’s (“PPF Telecom”) assets in Bulgaria, Hungary, Serbia and Slovakia. 

    The two companies aim to realise significant synergies, including procurement efficiencies, wholesale and roaming arrangements. The partnership allows PPF Telecom to leverage e&’s expertise in other markets, enhancing customer offerings and experience while opening cross-continent learning and career development opportunities for employees. 

    The parties have agreed that e& will pay €2.15bn upfront plus additional earn-out payments of up to €350m within three years after the closing if PPF Telecom exceeds certain financial targets – including a €75m if they aren’t. 

    PPF Telecom Group has 18m mobile subscribers, 1.1m fixed broadband customers, and a consolidated EBITDA of €1.6bn, plus 12,700 employees. 

    Next step in e&’s transformation 

    “With this move, we join forces with PPF to build and expand our international footprint in the attractive Central and Eastern Europe region and beyond. It is the next step of our transformation into a global technology group, offering e& multiple avenues to roll out its leading suite of B2B and B2C digital products in the CEE with significant synergies,” said e& chairman Jassem Mohamed Obaid Bu Ataba Alzaabi.  

    “The PPF Telecom portfolio, spanning four countries, exhibits a well-balanced structure, underpinned by robust macroeconomic fundamentals and stable currencies. The countries of its operations are characterised by regulatory stability, healthy competition, and highly attractive returns, positioning them among the most promising in Europe,” he added.  

    “Our priority remains focused on expanding our customer base and providing them with more digital services, both for consumers and enterprises,” said e& Group chief executive Hatem Dowidar. “This exciting partnership with PPF Group in Bulgaria, Hungary, Serbia, and Slovakia exemplifies our commitment to seeking new opportunities for collaboration and investment opportunities that will further accelerate our expansion.” 

    “By combining PPF Telecom’s expertise with our own innovative capabilities, we are poised to establish a major telecommunications presence in Central and Eastern Europe,” he added. 

    The partners will retain current PPF Telecom’s CEO, Balesh Sharma, and ensure continuity of the operations. The telcos operating under the Yettel brand (in Bulgaria, Montenegro, Serbia and Hungary) were purchased by PPF in 2018 from Telenor.

    Kept in Czech 

    PPF Telecom’s existing assets in the Czech Republic – its home market – including the Czech operator O2 Czech Republic and telecommunications infrastructure provider CETIN, will be transferred outside the PPF Telecom Group and not be part of the transaction. PPF will retain its 100% indirect share in O2 CZ and its current indirect share in CETIN Czech.  

    CETIN Group N.V. will control CETIN Czech but will transfer all of its non-Czech subsidiaries to PPF Telecom. In March 2022 PPF Telecom Group sold 30% stake in CETIN Group to Singapore’s sovereign fund GIC, having received all regulatory approvals 

    PPF CEO Jiří Šmejc said: “The purchase price…represents one of the largest ever deals for PPF. I am proud of how we have managed to grow the value of this asset since its purchase. I believe that the know-how and experience that PPF has in the region, combined with the global scale of our partner, will enable us to jointly share ambitions for synergies and further growth.” 

    According to Reuters, the agreement comes as PPF, controlled by the wife of billionaire founder Petr Kellner who died last year, aims to divest its once flagship consumer lending business in China and focus on acquisitions in Europe. PPF, which has investments in financial services, telecoms, media, mechanical engineering and biotech and posted a €239m profit last year. 

    The transaction is expected to close in or before the first quarter of 2024 and is subject to regulatory approvals, corporate restructuring and setting up and efficient capital structure for the deal that doesn’t harm the respective companies’ ratings. In addition, the transaction will likely be subject to the EU Foreign Subsidies Regulation review.