e& accelerates European drive with €2.2bn PPF deal

• e& has been looking to expand its global reach
• The Emirati operator has agreed to buy the majority of PPF Group’s telecom assets
• It plans to achieve a ‘major telecommunications presence’ in central and eastern Europe with the deal

UAE digital services provider e& has agreed to buy a controlling stake in the telecoms assets of PPF Group across four markets in central and eastern Europe (CEE), as part of its broader goal to boost its global play by diversifying into untapped territories.

The acquisition will see e& make an upfront payment of €2.15bn to own a stake of 50% plus one share in PPF Group’s telco assets in Bulgaria (mobile operator Yettel Bulgaria), Hungary (Yettel Hungary), Serbia (Yettel Serbia) and Slovakia (O2 Slovakia).

The deal is subject to an additional earn-out payment of up to €350m if PPF Group meets “certain financial targets” within three years of closing. But if these targets are not achieved, up to €75m will be subject to a clawback from PPF Group (an amount that is required to be returned due to special circumstances or events).

The transaction is expected to close by the first quarter of 2024, subject to regulatory clearances. Upon finalisation, e&’s portfolio will grow to 20 countries, in line with its strategy to “accelerate international growth and diversify into new geographies”.

According to e&, the takeover is “an unparalleled opportunity to establish a strong presence and foster developments within the CEE region”, which includes markets that “are characterised by stable regulatory environments, healthy competition and attractive returns”.

In a separate statement, PPF explained that the companies will retain current CEO of PPF Telecom Group (PPF Group’s telecoms business), Balesh Sharma. It also pointed out that its telco assets in the Czech Republic will not be included in the deal.

Commenting on the agreement with e&, PPF CEO, Jiří Šmejc, noted: “The purchase price of up to €2.5bn, 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.”

Hatem Dowidar, group CEO of e&, emphasised that the company remains focused on expanding its customer base and delivering more digital services. “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. We aim to realise synergies, optimise procurement efficiencies, and enhance customer offerings, establishing our position as a leading global tech group,” he said.

At the start of last month, e& announced it was in talks with PPF Group to explore opportunities in the CEE region – see e& hints at broader European push with PPF partnership talks. It also has been actively growing its reach in western Europe by gradually beefing up its stake in Vodafone Group, which runs major operations in the region, including Germany, Italy, the UK and Spain.

- Yanitsa Boyadzhieva, Deputy Editor, TelecomTV