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e& Group secures EU approval to buy Czech PPF’s telecoms assets

e& has secured “all regulatory approvals” and “closing of the deal remains subject to customary remaining closing terms”

by Kudakwashe Muzoriwa

September 25, 2024

EU assessing deal by e& Group for Czech PPF’s assets

Image credit: WAM

UAE telecoms giant e& Group said on Tuesday it secured the European Commission’s approval to complete the $2.4 bn (EUR2.2bn) acquisition of a controlling stake (50 per cent +1) in PPF Group’s telecom assets in Bulgaria, Hungary, Serbia, and Slovakia.

The deal will see e&, formerly called Etisalat, acquire the sole control of PPF Telecom, excluding its business in the Czech Republic.

e& offered the European Union (EU) concessions in July to allay concerns that it may be benefiting from distortive foreign subsidies, including an unlimited guarantee and a loan from UAE-controlled banks.

“The foreign subsidies received by e& did not lead to actual or potential negative effects on competition in the acquisition process,” the Commission said in a statement.

“e& was the sole bidder for the target and had sufficient own resources to perform the acquisition, which reflected the target’s market value, so that foreign subsidies did not alter the outcome of the acquisition process.”

The implementation of the remedies offered by e&, including the removal of an unlimited state guarantee and prohibition of any financing from Emirates Investment Authority and e& to PPF’s activities in the EU, will be monitored by an independent trustee.

e& said in a bourse filing that it has secured “all regulatory approvals” and “closing of the deal remains subject to customary remaining closing terms”.

The EU’s foreign subsidy rules, which became effective on July 12, 2023, state that companies must inform the commission if at least one of the merging companies, the acquired firm, or the joint venture is located in the EU and has a turnover of at least EUR500m.

With a market capitalisation of Dhs165.2bn as of September 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.