Vodafone Group plans to sell its Vodafone Hungary business to a consortium comprised of 4iG Public Limited Company and Corvinus, a Hungarian state holding company, for $1.79 billion. 4iG will own 51% of the consortium, and the Hungarian government will own 49%.
The service provider says its Vodafone Hungary business is one of the leading converged network operators in Hungary, and a combination with 4iG will create a clear #2 operator across mobile and fixed communications with broader IT capabilities. It also supports the Hungarian state’s goal of creating a national ICT champion.
Budapest-based 4iG offers IT services, telecommunications connectivity and systems integration. It employs 6,200 people in Hungary and the Western Balkans.
Vodafone CEO Nick Read said in a statement: “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 parties expect to close the deal by the end of 2022.
Vodafone’s shared services business in Hungary – VOIS – is not included in the transaction, and it will continue to provide services to Vodafone’s other operating companies.
The analysts at New Street Research led by James Ratzer wrote today, “Ever since Vodafone surprised the market with higher capex in May 2021, the company has been under pressure to execute on M&A transactions to highlight the value in its portfolio.” They noted that Vodafone missed out on acquiring Deutsche Telekom’s tower assets. “But we certainly weren’t expecting a sell-down in Hungary as the first significant M&A transaction,” they said.
New Street added, “We believe Vodafone was not actively looking to sell its Hungarian assets, but was approached by 4iG and the Hungarian government, who are keen to build a national champion to compete against Magyar Telekom (owned by DT), and given the multiple being offered, this was a sensible deal to help unlock value for Vodafone.”