Abu Dhabi’s e& Group completes $2.3bn acquisition PPF Telecom

UAE telecoms giant e& Group said on Thursday that it had completed the acquisition of a controlling stake in PPF Telecom Group’s assets in Bulgaria, Hungary, Serbia and Slovakia for $2.3bn (EUR2.15bn), following through on its plan to boost its global presence.

e& said the investment represents a pivotal moment in its international strategy to scale and add resilience to its operational profile by expanding into the European telecom market.

The holding company for these assets will be named “e& PPF Telecom”, the Abu Dhabi-listed telecoms major said in a bourse filing.

e& PPF Telecom will operate under the Yettel and O2 brands, serving over 10 million customers in Bulgaria, Hungary, Serbia, and Slovakia. Its infrastructure arm, CETIN, supports its operations, contributing to consistent financial performance. The company generated approximately EUR2bn in combined revenues in 2023, with a 44 per cent EBITDA margin.

The deal includes as much as EUR350m in milestone payments if PPF exceeds certain targets and has a clawback provision of as much as EUR75m if it doesn’t.

e& PPF Telecom’s financials will be consolidated under the e& international vertical effective November 2024.

With a market capitalisation of Dhs148bn as of October 25, 2024, e& has emerged as one of Abu Dhabi’s top overseas investors along with the emirate’s various sovereign funds.

The telecoms group reported a 16.7 per cent increase in half-year profit to Dhs5.5bn, supported by an increase its subscriber base and expansion of partnerships across its verticals.

e&’s revenues in the six months to June 30 reached Dhs28.3bn, a 6 per cent year-on-year increase compared to the same period a year ago.

The investment marks the Abu Dhabi firm’s second large foray into Europe since its investment in Vodafone.

e& has built up a stake in UK’s Vodafone since its initial investment in May 2022 and the two companies agreed to deepen their relationship in May 2023.

Closer to home, e& bought a $400m stake in the super app developed by Careem in April 2023 and was considering increasing its shareholding in Saudi Arabia’s Mobily.

The company is also considering buying into Ethiopia’s state-controlled telecom operator and has explored an offer for part or all of Vodafone’s stake in Johannesburg-listed Vodacom, according to a Bloomberg report.

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