Deal is done: the state and a private company will be the new owners of Vodafone Hungary – UPDATE

Hungarian state investment company Corvinus has inked a deal to purchase a 49 percent stake in Vodafone Europe’s Hungarian unit, while 4iG unit Antenna Hungaria is acquiring a 51 percent stake in the telecom company, Márton Nagy, the economy development minister, said on Monday.

The 660 billion forint (EUR 1.6bn) acquisition is Hungary’s biggest since 1990, the minister said in a statement.

Due diligence on Vodafone Hungary has been completed and the financial report is expected to be concluded on Jan. 31, the statement added.

“In an economic situation burdened by the war and sanctions, we must not give up on our endeavour to further strengthen Hungary’s competitiveness and independence,” Nagy said in the statement. “It is a primary objective of the government to establish national ownership in sectors of national strategic importance such as insurance and telecommunications, in addition to the banking, energy and media sectors. Vodafone Hungary’s purchase serves this goal and will further strengthen our country’s sovereignty.”

As a result of the acquisition, a fully Hungarian-owned “national champion” will be created in the domestic telecoms sector, helping to improve Hungary’s competitiveness by meeting 21st century digital standards and providing high quality services to individuals and corporate clients, the statement said.

“The transaction will also help to boost market competition, reduce costs and improve the quality of services,” it added.

Vodafone Hungary, the second largest player in Hungary, provides services to 3,8 million customers.

LMP reaction

The opposition LMP party said the government should instead be spending taxpayers’ money on increasing the wages of teachers. Antal Csárdi, the party’s deputy group leader, told a press conference that giving teachers a 25 percent wage increase would cost 170 billion forints, around half the amount of the state’s 49 percent stake in Vodafone. Csárdi also raised the possibility that 4iG may eventually take over the state’s stake at a discount, adding that it was doubtful that the state would secure a return on its investment.

VODAFONE reaction

“Vodafone Hungary cannot provide any further information on the transaction. It is important to stress, however, that Vodafone Hungary’s business operations are smooth and continuous, and its services are fully operational and of the usual high quality. The operator remains committed to providing an excellent customer experience and to the digital development of Hungary.”