Magyar Telekom agrees to sell T-Systems Hungary to 4iG
Magyar Telekom (MTel) has agreed to sell its IT unit T-Systems Hungary Zrt. to 4iG Nyrt., the listed companies said in disclosures on the website of the Budapest Stock Exchange (BÉT) on Tuesday. The deal is expected to be closed by the end of 2019, subject to due diligence and regulatory approval.
MTel and 4iG have agreed on the purchase price - which was not disclosed - and the main conditions of the transaction.
Prior to the closing, MTel will take over T-Systemsʼ SME business. After the closing, T-Systems will continue to sell MTelʼs telecommunications services to big businesses and public sector institutions under a long-term partnership agreement. 4iG will also get the right to use the T-Systems brand in Hungary for three years after the transaction is closed.
Trade in shares of 4iG was suspended before the opening bell on Tuesday pending the extraordinary announcement. Trade restarted at noon, and shares of both companies made significant gains.
The investor Gellért Jászai, chairman and CEO of 4iG, recently acquired 32.02% of 4iG shares and will raise that stake to 40.2%, after the formality of a mandatory purchase offer under an agreement with his business partner Lőrinc Mészáros. The latter continues to indirectly hold 19.82% of 4iG shares through Konzum PE Private Equity Fund and 9.95% through Opus Global, according to information on the BÉT website.
Jászai suggested earlier that he has no plans to raise his stake in 4iG over 40.2%, and added that Mészáros would remain a partner in the business. He said in an interview published in late June that 4iG would look to acquire larger rivals by issuing debt or taking out loans to finance the deals.
The Konzum-Opus group acquired 4iG in 2018. Konzum and Opus - which have since merged - announced in early April that Jászai would resign from his executive positions in the two companies to focus on heading group member 4iG.
T-Systems Hungary had turnover of HUF 114.2 billion last year, public records show, according to state news wire MTI, while 4iGʼs revenue was just over HUF 14.0 bln in 2018.
"The accelerating digitalization of the economy signifies a unique business opportunity for 4iG," Jászai was cited as saying in a press release sent to the Budapest Business Journal. "It is the goal of our company, in this dynamically developing market environment, to become one of the leading big companies in the IT sector here at home, and in the region within 2-3 years."
"We are proud of T-Systems, which with its 1,600 staff and several thousand partners, is one of the countryʼs leading providers of infocommunications services, and a partner in the transformation of numerous companies and institutions," said Tibor Rékasi, CEO of Magyar Telekom. "We have reached an agreement with a professional investor that will continue this innovative activity and be able to support the further growth of T-Systems."
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