“The purchase price of up to EUR 2.5 billion, including contractual earn-out payments, represents one of the largest ever deals for PPF. I am proud of how we have managed to grow the value of this asset since its purchase,” shares Jiří Šmejc, CEO of PPF Group.
“I believe that the know-how and experience that PPF has in the region, combined with the global scale of our partner, will enable us to jointly share ambitions for synergies and further growth,” he adds, on the prospect of cooperation with e&.
The transaction parties have agreed that e& will pay EUR 2.15 bln upfront at the closing for the acquisition of the 50% stake, plus one share in PPF Telecom and additional earn-out payments of up to EUR 350 million within three years after the closing if PPF Telecom exceeds certain financial targets. This is subject to a clawback of up to EUR 75 mln if such financial targets are not achieved.
PPF Telecom's existing assets in the Czech Republic, including the Czech operator O2 Czech Republic (O2 CZ) and telecommunications infrastructure provider Cetin (Cetin Czech), will be transferred outside the PPF Telecom Group and will not be part of the transaction. PPF's telco assets in the Czech Republic are also excluded from the deal.
The partners will retain the current CEO of PPF Telecom’s, Balesh Sharma, while drawing on the broad expertise of PPF Telecom’s teams in their markets. PPF will also retain its 100% indirect share in O2 CZ and its current indirect share in Cetin Czech.
Cetin Group N.V., through which PPF will continue to control Cetin Czech, will transfer all its non-Czech subsidiaries to PPF Telecom. PPF and e& aim to maintain PPF Telecom’s current rating level after the transaction closing, as well as CETIN Group’s current rating level.
“As e& continues its path to be a leading global technology group, our priority remains focused on expanding our customer base and providing them with more digital services, both for consumers and enterprises. This exciting partnership with PPF Group in Bulgaria, Hungary, Serbia, and Slovakia exemplifies our commitment to seeking new opportunities for collaboration and investment opportunities that will further accelerate our expansion,” comments Hatem Dowidar, group CEO at e&.
The transaction sets the foundation for a partnership between PPF and e& that will seek to build a major telecommunications business in central and eastern Europe. PPF and e& aim to realize significant synergies in various areas, including procurement efficiencies, wholesale and roaming arrangements.
The transaction is expected to close within the first quarter of 2024, and is subject to regulatory approvals, corporate reorganization, formation of optimal and efficient capital structure within the transaction perimeter, certain administrative procedures, and other customary closing conditions. In addition, the transaction will likely be subject to the EU Foreign Subsidies Regulation review.
