e& seals its PPF Telecom Group acquisition

State-owned telco Emirates Telecommunications Group (e&) completed its acquisition of a controlling stake (50% +1 economic share) in PPF Telecom Group, just a month after the European Commission gave the transaction its greenlight, according to a press release (pdf). The group’s assets will come together under the new holding company e& PPF Telecom, which includes operations across Central and Eastern Europe.

REMEMBER- The European Commission approved the acquisition last month, after it launched its first-ever anti-subsidy probe into a foreign buyer against e&, which concluded that market competition won’t be affected by this transaction. The Commission placed several conditions on e& for an extendable duration of 10 years, including a commitment not to funnel any state funding into PPF’s EU operations without EU review.

Breaking down the transaction: The total transaction value is EUR 2.35 bn, including a EUR 200 mn adjustment funds to account for a lower debt position and increase working capital. If e& PPF Telecom exceeds certain financial targets within three years after closing, PPF Group will also be given up to EUR 350 mn in earn-out payments, and if they are not achieved, there will be a clawback amount of up to EUR 75 mn. PPF Group also has a put option for its remaining shares applicable after five years of closure, while e& holds a call option for the same shares.

The new telecom giant’s structure: e& PPF Telecom will consist of several brands including Yettel Bulgaria, Yettel Hungary, Yettel Serbia, and O2 Slovakia, in addition to Cetin’s infrastructure operations, which currently serve over 10 mn customers with combined revenues of EUR 2 bn in 2023.