Orban tightens hold over telco sector as Vodafone sells Hungarian unit (updated)

4ig.

22/08/2022 10:38

(Recasts with political context, share price)
    LONDON/BUDAPEST, Aug 22 (Reuters) - Britain's Vodafone
 VOD.L  will sell its Hungarian business for 715 billion forints
($1.8 billion) in cash to local IT company  4iG and the
Hungarian state, consolidating the hold of Prime Minister Viktor
Orban's government over the telecoms sector.
    Orban, in power since 2010, has expanded his nationalist
government's influence in areas such as energy, banking and the
media, which it considers strategic, and long harboured plans to
tighten its grip over the telecoms sector.
    The deal — which does not include Vodafone's shared services
business VOIS — is expected to create Hungary's second largest
telecoms operator. 4iG will hold a majority 51% stake while the
Hungarian state will hold 49%. 
    "The combination of 4iG and Vodafone is a significant step
towards building a Hungarian owned national champion in the
(Information and Communications Technology) sector," 4iG said in
a statement on Monday.
    The British mobile phone and broadband group said it had
agreed non-binding terms with the buyers, 4iG  IGNY.BU  and
state-run Corvinus Zrt. 
    Minister for Economic Development Marton Nagy in a statement
noted the government's prior successes with boosting ownership
in other strategically important sectors. 
    "Now there is a chance for a Hungarian company, with a state
ownership stake, to become a significant player in the telecoms
market as well," he said.  
    4iG has grown exponentially in recent years, becoming the
dominant ICT group in Hungary through acquisitions, lucrative
state contracts and growing its existing operations.
    CEO and largest shareholder Gellert Jaszai told Reuters in
2019 that 4iG planned to grow through debt-fuelled acquisitions
in Central Europe.  urn:newsml:reuters.com:*:nL8N23Q4J6
    Businessmen close to Hungary's ruling Fidesz party have come
to dominate several industries as the government, which was
re-elected for a fourth consecutive term in April, expands its
direct involvement in a number of key sectors. 
    "The Hungarian Government has a clear strategy to build a
Hungarian owned national champion in the (Information and
Communications Technology) sector," Vodafone Chief Executive
Nick Read said in a statement.
    The sale is expected to be completed by the end of 2022.
    4iG shares jumped 9.25% on Monday to trade at 850 forints on
the Budapest bourse at 0843 GMT.
    
   
($1 = 404.0500 forints)

 (Reporting by Pushkala Aripaka in Bengaluru and Sachin
Ravikumar in London; Additional reporting by Krisztina Than;
Editing by Rashmi Aich and Kirsten Donovan)
 ((Pushkala.A@thomsonreuters.com; Twitter: @pullthekart; Mobile:
+91 852 751 3793 ;))