EU probes e& Group deal to acquire Czech PPF Group’s assets
Now Reading
EU probes e& Group deal to acquire Czech PPF Group’s telecoms assets

EU probes e& Group deal to acquire Czech PPF Group’s telecoms assets

The examination of the acquisition is the first by the European Commission under the bloc’s Foreign Subsidies Regulation

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

UAE telecoms giant e& Group’s $2.4 bn (EUR2.2bn) offer to acquire PPF Telecom Group is under an “in-depth” probe from European Union (EU) competition regulators amid concerns that the deal infringes the bloc’s new foreign-subsidy rules.

“The preliminary investigation indicates that there are sufficient indications that e& has received foreign subsidies distorting the EU internal market,” the European Commission said in a statement on Monday.

The funds may have allowed the telecoms major to outbid rivals as part of a deal for PPF’s telecoms businesses in Bulgaria, Hungary, Serbia and Slovakia.

The commission said that the alleged subsidies notably take the form of an unlimited guarantee from the UAE and a loan from UAE-controlled banks directly facilitating the transaction. The anti-trust regulator said it was notified about the e&—PPF Telecom deal on April 26 and has until October 15 to make a decision.

The e& Group investigation is the first under the foreign subsidies regulation to leverage the EU’s new rules to examine a potentially harmful takeover.

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.

“The European Commission’s decision to open an in-depth investigation is a procedural step, which does not prejudge the outcome of the investigation,” Karim Bennis, e&’s group chief financial officer said in a bourse filing while noting that the company plans to close the deal before year-end.

e& Group’s global ambitions

Last August, e& signed a binding agreement for a controlling stake in PPF Telecoms’ service and infrastructure companies in four European countries as part of the group’s broader strategy to boost its global presence by diversifying into new geographies.

The transaction 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 does not.

PPF Telecom, part of the Kellner family’s business empire, comprises Yettel Bulgaria, Yettel Hungary, Yettel Serbia, O2 Slovakia, and CETIN and O2 Networks infrastructure businesses in those countries.

The deal marked the Abu Dhabi-listed 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.

e& refuted a media report in May that suggested that the group was considering acquiring European cable and pay-TV operator United Group BV’s assets. The UAE telecoms giant is reportedly 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.

With a market capitalisation of Dhs140.5bn as of June 11, 2024, e& has emerged as one of Abu Dhabi’s top overseas investors along with the emirate’s various sovereign funds.

Read: e& Group refutes report of potential United Group deal

You might also like


Scroll To Top