Vodafone sells Hungarian division worth £1.5 billion

Vodafone has announced it is selling its Hungarian arm in a £1.5billion deal with a domestic company.

The telecoms giant said it had “agreed on principles” for the deal – akin to a letter of intent.

The Hungarian company 4iG would take over Vodafone Hungary.

4iG will pay 715 billion Hungarian forints (£1.5 billion) for the last financial year, which is 9.1 times its Ebitdaal (earnings before interest, taxes, depreciation and amortization, after leasing).

Bosses said the deal fits well with the Hungarian government’s hopes of creating a major locally owned telecoms giant.

After the purchase, 4iG will be the second largest mobile and fixed-line operator in Hungary.

Vodafone CEO Nick Read said: “The Hungarian government has a clear strategy to build a Hungarian national champion in the ICT (Information and Communication Technology) sector.

“This combination with 4iG will allow Vodafone Hungary, which has a proud history of success and innovation in the country, to play an important role in the future growth and development of the sector as a much more scaled and fully converged operator.

“The merged company will increase competition and have better access to investments to drive Hungary’s digitization.”

Victoria Scholar, Head of Investment at Interactive Investor, said: “It is clear that the Hungarian government is interested in building its own national telecoms champion, with Vodafone ready to take the money in exchange for the spin-off.

“In November last year, Nick Read, CEO of Vodafone, said he was aiming for consolidation in Europe.

“Now the telecoms giant can focus more on Germany, a market it believes is the most attractive on the continent.

“There is also M&A (merger and acquisition) potential for Vodafone in the UK given recent reports that a merger with Three’s UK division is being considered.

“Vodafone’s share price has been down for the long term, having halved since peaking in January 2018, but still offers an attractive dividend yield.”

https://www.independent.ie/business/world/vodafone-to-sell-hungarian-arm-in-15bn-deal-41927758.html Vodafone sells Hungarian division worth £1.5 billion

Fry Electronics Team

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