Telenor will sell its assets in Central and Eastern Europe (CEE) to the PPF Group, a Czech Republic-based financial investment group, for a total of €2.8bn.
The transaction includes Telenor’s wholly-owned mobile operations in Hungary, Bulgaria, Montenegro and Serbia and the technology service provider Telenor Common Operation.
PPF Group is the largest private investment group in CEE with approximately EUR 35 billion of assets under its control. PPF Group invests in various sectors, including banking, consumer finance, real estate, mining and telecommunications. Previous transaction experience includes the acquisition of O2 Czech Republic from Telefonica in 2013 and Nova Broadcasting Group in Bulgaria in 2018.
The parties have agreed on a deferred purchase price, where EUR 400 million of the proceeds will be paid in four instalments over four years.
The transaction is expected to be completed within Q3 2018. As of first quarter 2018, the CEE operations will be treated as an asset held for sale and discontinued operations in Telenor Group’s financial reporting. The transaction is estimated to result in an accounting gain after tax of around 3 NOK billion to be booked after the completion of the transaction.
Telenor has had mobile operations in the CEE region for 25 years. Telenor entered the Hungarian market in 1994 through the acquisition of Pannon and later expanded its presence in the region through launch of mobile services in Montenegro in 1996 and the acquisition of Mobi 063 in Serbia in 2006. Finally, Telenor acquired Globul in Bulgaria in 2013.