As per the terms of the transaction, 4iG will acquire a controlling interest of 51% in Vodafone Hungary through its subsidiary Antenna Hungária, while the Hungarian State will own a 49% indirect stake

Vodafone_Shop,_Hauptstraße_43,_97941_Tauberbischofsheim_2

Vodafone to divest Vodafone Hungary to 4iG and Corvinus in €1.7bn deal. (Credit: Triplec85/Wikimedia Commons)

Vodafone has entered into binding terms with telecommunications and IT group 4iG and Hungarian sovereign investment management company Corvinus International Investment to divest Vodafone Magyarország (Vodafone Hungary) to the duo in a deal worth HUF660bn (€1.7bn).

As per the terms of the all-cash deal, 4iG will acquire a controlling interest of 51% in Vodafone Hungary through its subsidiary Antenna Hungária, while the Hungarian State will own a 49% indirect stake.

Based in Budapest, Hungary, 4iG is an IT systems integrator.

Upon the closing of the deal, the combined portfolio of 4iG and Vodafone Hungary is expected to become the second largest in the mobile voice and internet services market in Hungary.

4iG chairman Gellért Jászai said: “The acquisition of Vodafone Hungary opens a new chapter in the Hungarian telecommunications market. It is the first info-communications group in almost thirty years that can operate as a Hungarian majority-owned convergent operator.

“The strategic cooperation between the Hungarian state and 4iG in this transaction will not only transform the market but also improve competitiveness and accelerate the digital transformation of the economy.”

Vodafone entered into heads of terms with 4iG and Corvinus in relation to the divestiture of its Hungary operations in August 2022.

The total cash consideration to be received by Vodafone is equivalent to a multiple of 8.4x adjusted EBITDAaL for the 12-month period that ended on 31 March 2022.

The cash proceeds from the transaction are expected to be utilised for deleveraging, stated Vodafone.

Vodafone Group interim chief executive Margherita Della Valle said: “This combination establishes a scaled converged operator across mobile and fixed communications and supports the Hungarian government’s goal of creating a national Information and Communications Technology champion.

“The combined entity will increase competition and accelerate investment in the ongoing digitalisation of Hungary.”

The deal, which is subject to customary conditions, is expected to be completed this month.