Under the leadership of Brooke Lindsay (pictured), Group Chief Legal & Compliance Officer, Emirates Telecommunications Group Company “e&” (formerly Etisalat Group) has recently finalized a binding agreement with PPF Group (“PPF”) to acquire a controlling stake of 50% + 1 economic share in PPF Telecom’s assets across Bulgaria, Hungary, Serbia, and Slovakia.
The comprehensive PPF Telecom portfolio includes Yettel Bulgaria, Yettel Hungary, Yettel Serbia, O2 Slovakia service operations, as well as the CETIN and O2 Networks infrastructure businesses in these countries. With a customer base exceeding 10 million, PPF Telecom has achieved combined revenues and EBITDAaL of Euro 1.8 billion and Euro 0.7 billion, respectively, in 2022.
The acquisition aligns perfectly with e&’s strategic vision of expanding internationally and venturing into new geographies. This significant move offers unparalleled opportunities for e& to establish a robust presence and foster growth within the Central and Eastern European (CEE) region. Moreover, the agreement opens doors for potential future collaborations between e& and PPF, a prominent investor in the region.
In exchange for the acquisition, e& will provide an upfront consideration of Euro 2,150 million, securing a 50%+1 share economic stake in both the service and infrastructure companies, with a few exceptions in Hungary where Corvinus holds a 25% stake in the respective businesses. The transaction also includes provisions for up to Euro 350 million in earn-out payments if PPF Telecom surpasses specific financial targets within three years after closing. In case these financial goals are not met, a clawback of up to Euro 75 million is applicable. Additionally, PPF will have a put option for its remaining stake in PPF Telecom, exercisable five years after closing, with e& holding a reciprocal call option. The transaction is unrelated to related parties and will be financed through debt.
Once the deal concludes, e& will integrate the acquired assets fully under its international vertical. The financial impact of this strategic move is expected to represent approximately 14% and 11% increments in e&’s total revenues and EBITDA, respectively, based on FY 2022 financials. Moreover, this acquisition will expand e&’s telecom portfolio to 20 countries.
As of now, the completion of the transaction remains subject to regulatory approvals and certain closing conditions.