The announcement detailed that Hungarian 4iG and state controlled Corvinus Zrt. will together acquire Vodafone’s Hungarian business by the end of 2022.
The sale translates to roughly 715 billion Hungarian Forints in cash. ‘The Hungarian Government has a clear strategy to build a Hungarian owned national champion in the sector,’ Vodafone Chief Executive Nick Read said in a statement.
The Hungarian Minister for Economic Affairs, Márton Nagy announced the acquisition on Monday morning. In a statement published by MTI, he wrote that the government has a clear goal to acquire businesses in sectors that are essential in terms of Hungary’s strategic interests. He added that the broader objective is to attain a Hungarian majority ownership in most of these sectors, so the country does not need to rely on foreign giants. He highlighted that in the banking, energy and media sectors this objective has already been reached, and now the government has come closer to achieving the same in telecommunications.
According to the plans, 4iG will hold 51 per cent of the shares, while the Hungarian state will own 49 per cent. 4iG recently acquired the Digi Group, a telecom company, and also purchased a majority stake in Antenna Hungária, a Hungarian broadcasting and telecom business as well. (The Hungarian state owns a 23 per cent stake in Antenna Hungária.).
Effects of the Acquisition
In terms of the number of its clients, Vodafone is already the second largest telecom company in the country. With over 3.8 million retail and business customers, Vodafone had over 5 million subscriptions in July. As a result of the acquisition, this figure is expected to increase to 7.6 million by the end of the year. According to 4iG, the transaction will fundamentally reshape the Hungarian telecommunications market.
Gellért Jászai, chairman and CEO of 4iG, said: ‘The acquisition of Vodafone Hungary will be the most significant domestic telco transaction in the last thirty years, of a similar extent to the privatisation of Matáv after the regime change. The acquisition will create a predominantly Hungarian-owned group of info-communications companies and a clear number two operator in the Hungarian market.’