- €2bn deal finalised
- Now called e& PPF Telecom
- E& now in 38 countries
The UAE telecommunications company e&, formerly known as Etisalat, has completed its acquisition of 50 percent plus one share in the Czech PPF Group’s telecoms business in Bulgaria, Hungary, Serbia and Slovakia.
The deal, which was approved by the European Commission in September, is valued at €2.15 billion ($2.3 billion), plus a potential earn-out of up to €350 million if agreed financial targets are met within three years of closing.
The acquisition by e& excludes PPF Telecom’s telco business in the Czech Republic, which will remain wholly owned by PPF, its CEO, Jiří Šmejc, said.
The new company, e& PPF Telecom, will operate as a standalone entity, retaining its current management team and employee base, including PPF Telecom’s CEO, Balesh Sharma.
Hatem Dowidar, group CEO at e&, said: “The completion of our transaction to partner with PPF Telecom is a momentous point in e&’s journey, extending our telecom footprint to 20 countries and the overall footprint of e& operations to 38 countries, across the Middle East, Asia and Africa, and now Central and Eastern Europe.
“PPF Telecom’s regional expertise and e&’s global capabilities create a powerful platform for growth and innovation across these dynamic markets.”
The complex transaction was first agreed upon in August 2022, when e& signed a binding agreement with PPF for its telco businesses across the four countries, which have more than 10 million customers.
The EC approved the deal last month after extensive dialogue. It said that the approval was conditional on full compliance with the commitments offered by the parties.
For e& these include the removal of an unlimited state guarantee and prohibition of any financing from the Emirates Investment Authority, a sovereign fund; not to channel foreign subsidies to the activities of the merged entity in the internal market; and to introduce appropriate monitoring mechanisms in particular areas of risk.
Shares in e& have fallen by more than half since their most recent peak in 2022, over concerns related to difficulties with some of the telecom operator’s foreign investments, analysts said.
The company’s second quarter results showed it generated more than half of its revenue from its domestic consumer telecom business, despite operating in 32 countries at the time.
Some of the decline was down to difficulties at its subsidiary Maroc Telecom, which was ordered to pay AED2.3 billion ($626 million) to Casablanca’s Wana Corporate after losing a court appeal.
The company is also nursing a paper loss of about $2 billion on the London-listed Vodafone after a sustained fall in its stock.
Nishit Lakhotia, head of research at Bahrain’s Sico Bank, said in August: “The worst seems to be over in terms of pressure on Etisalat’s share price. Everything negative is already priced in from here.”