Vodafone Group entered binding terms for the sale of its business in Hungary to IT and communications business 4iG and a state-controlled investment company, with the previously-flagged deal expected to be completed at the end of the month.

In a statement, Vodafone announced due diligence had been completed by all relevant parties, with the operator group set to raise HUF660 billion (€1.7 billion) from the deal. It intends to use the cash to cut debt.

4iG lauded the agreement as “one of the most significant transactions in the history of Hungarian telecommunications” and will see the company own a 51 per cent stake in operator Vodafone Hungary.

The minority share will be held by Corvinus International Investment, an entity owned by the Hungarian state.

Hailing the deal, 4iG chairman Gellert Jaszai said it would improve competitiveness in the industry and “accelerate the digital transformation of the economy.”

The acquisition is part of 4iG’s ambition to push converged communications services following its purchase of fixed and pay-TV assets from Digi, which completed in early 2021.

Vodafone Hungary is the second-largest mobile player in the country by GSMA Intelligence connection estimates for Q4 2022, with almost 3 million. The market is led by Deutsche Telekom’s local unit Magyar Telecom, which had 5.2 million connections for the same period.