Vodafone has struck a deal with Hungarian tech firm 4iG and state-backed Corvinus Zrt to sell off its operations in the country for £1.53bn (€1.8bn) as it pushes ahead with efforts to streamline its sprawling operations.
The move marks an acceleration of boss Nick Read’s move to carve up Vodafone amid increasing pressure from notorious Swedish activist investor Cevian Capital, which was revealed to have built up a stake in the firm in January and has been agitating for change.
Read indicated earlier this year that he was gearing up for a flurry of deals to consolidate Vodafone’s operations across Europe, telling investors in February the telecoms giant was in talks in “multiple parties in multiple markets”.
Cevian has reportedly been pushing bosses at Vodafone to be more aggressive in consolidating in driving consolidation in markets such as Spain, Italy and the UK and the sale of poor performing arms of the business.
The fresh deal will help Read drive down some Vodafone’s debt levels and spawn Hungary’s second largest telecoms operator, in which 4iG will hold a majority 51 per cent stake while the Hungarian state will hold 49 per cent.
In a statement this morning, Read said that the Hungarian government had a “clear strategy to build a Hungarian owned national champion in the ICT sector”.
“This combination with 4iG will allow Vodafone Hungary, which has a proud history of success and innovation in the country, to play a major role in the future growth and development of the sector as a much stronger scaled and fully converged operator,” he said.
The deal is now subject to confirmatory due diligence, and the parties entering into binding transaction documentation and winning regulatory approval, with the deal slated for completion by the end of 2022.
Bosses said today the deal marks a multiple of 9.1 more than adjusted profits before deductibles for the year ending 31 March 2022. Vodafone shares fell beyond one per cent in morning trading this morning.