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Vodafone Group PLC on Monday said it has entered into heads of terms with 4iG Public Ltd Co and Corvinus Zrt for the sale of Vodafone Magyarorszag Tavkozlesi Zrt, or Vodafone Hungary, for an enterprise value of €1.8 billion.
The Newbury, England-based telecommunications company said the sale price represents a 9.1 times multiple of Vodafone Hungary's adjusted earnings before interest, tax, depreciation and amortisation after leases for the financial year that ended March 31.
The FTSE 100 firm is targeting the completion of the sale by the end of 2022. It noted that its shared services business in Hungary, VOIS, is not included in the transaction.
Vodafone said the combination of the Hungarian business with 4iG is ‘complementary’, with limited overlaps.
The addition of Vodafone Hungary's infrastructure to 4iG will create a ‘stronger competitor to the incumbent operator’, it said.
Vodafone Hungary is ‘a leading’ converged network operator in Hungary.
‘The Hungarian government has a clear strategy to build a Hungarian-owned national champion in the information and communications technology 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,’ Vodafone Chief Executive Nick Read commented.
Vodafone shares were trading 0.2% higher at 122.00 pence each in London on Monday morning.
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