Hungarian Telephone and Cable Corp. bought fixed-line operator Invitel Zrt to compete with former monopoly Magyar Telekom Nyrt, HTCC said in a statement through Business Wire today.
HTCC will pay €470 million (Ft 119 billion) to buy 100% of Invitel, including its debt, from American International Group Inc. and GMT Communication Partners Ltd. Invitel, based in a Budapest suburb, was formerly known as Vivendi Telecom. It is Magyar Telekom's largest competitor for the country's shrinking number of landline customers.
HTCC, the Hungarian unit of Denmark's TDC A/S, is counting on the purchase to help it gain more customers. “It enables the combined entity to pursue a meaningful share of both the local Hungarian and the broader Central and East European market,'' HTCC Chief Executive Officer Torben Holm said in the statement. HTCC will take on new debt and offer as many as 1.1 million of its own shares, or 6.2% of the total, to pay for the stake.