Vodafone Group PLC (LSE:VOD) said it has agreed the potential sale of its Vodafone Hungary business for €1.8bn in cash to 4iG Public Limited Company and Corvinus Zrt, a Hungarian state holding company.
The combination of Vodafone Hungary (Vodafone Magyarország Távközlési Zrt) and 4iG creates a stronger competitor to the incumbent operator, Vodafone 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,” commented Vodafone CEO Nick Read.
“The combined entity will increase competition and have greater access to investment to further the digitalisation of Hungary," he added.
Vodafone noted that its shared services business in Hungary - VOIS - is not included in the deal and will continue to provide services to Vodafone's other operating companies.
The sale is subject to the completion of due diligence, the parties entering into binding transaction documentation and obtaining regulatory approval. The parties are aiming for completion by the end of this year.
The consideration represents a multiple of 9.1x adjusted earnings before interest, tax, depreciation and amortisation after leases (EBITDAaL) for the 12-month period ending March 31, 2022.