As reported by Capacity last month, UAE-headquartered e& and Czech PPF Group recently began formal discussions to create a partnership to explore strategic collaboration opportunities in central and south-eastern Europe.
Today, the two companies signed an agreement for e& to acquire a 50% plus one share controlling stake in PPF Telecom Group’s assets in Bulgaria, Hungary, Serbia and Slovakia.
The two parties agreed that e& will pay €2.15 billion upfront at the closing for the acquisition and will be financed by debt.
If PPF Telecom exceeds certain financial targets, e& will pay out up to a further €350 million, but if targets are not hit the deal is subject to a €75 million claw back, which would see PPF Group return some of the funds paid out to it by e&.
In addition, PPF has a put option for its remaining stake in PPF Telecom exercisable 5 years after closing and e& would have a reciprocal call option.
"The purchase price of up to €2.5 billion, including contractual earn-out payments, 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," said PPF CEO Jiří Šmejc.
PPF Telecom CEO Balesh Sharma will maintain his position under the new owners.
In PPF’s home market its mobile brand, 02 Czech Republic, and towerco subsidiary, CETIN Czech, will not be included in the deal.
These two business units will be transferred outside of PPF Telecom Group, with the wider PPF Group maintaining its 100% ownership of 02 Czech Republic and its current share in CETIN Czech.
CETIN subsidiaries in Bulgaria, Hungary, Serbia and Slovakia will transfer all of its non-Czech subsidiaries to PPF Telecom.
Speaking on why the Czech Republic was excluded, Šmejc said “it is not only due to the home market's specific position but also due to our plans to create synergies between the companies operating in the Czech Republic.”
“As e& continues on its path to be a leading global technology group, our priority remains focused on expanding our customer base and providing them with more digital services, both for consumers and enterprises,” Hatem Dowidar, Group CEO, e& commented.
e& currently boasts 165 million global subscribers, including 13.9 million in UAE, according to its Q2 2023 results, which were also released today.
PPF Telecom serves more than 10 million customers and posted combined revenues and EBITDAaL (Earnings before interest, tax of depreciation and amortisation after leases) of €1.8 billion and €0.7 billion respectively in 2022. e&’s acquisition will boost its international markets to 20 countries.
Completion of the transaction remains subject to regulatory approvals and certain closing conditions.
