PPF Group agreed to sell a controlling stake in its telecoms units in Bulgaria, Hungary, Serbia and Slovakia to e& for an initial €2.2 billion, as the UAE-based operator continues a strategy to increase interests outside of its home market.

Under the agreement, e& will buy a stake of 50 per cent plus one share in PPF Telecom Group, though the transaction excludes the latter’s assets in the Czech Republic, which are being moved into a separate company.

The deal was announced alongside e&’s Q2 results and is subject to regulatory approval. It comes after the pair revealed discussions were underway on a potential partnership last month.

Under the terms of the agreement, e& could end up paying an additional €350 million, or be able to claw back up to €75 million depending on PPF Telecom meeting certain financial targets within three years of closing.

PPF Telecom CEO Balesh Sharma is set to remain in place following the closure of the deal.

In a joint statement, the companies noted the “transaction sets the foundation for a partnership between PPF and e& that will seek to build a major telecommunications business in central and eastern Europe”.

They expect to gain synergies in procurement, wholesale and roaming agreements, among others, alongside launching new services.

PPF bought its mobile assets in Hungary, Bulgaria and Serbia from Telenor in 2018 together with a business in Montenegro it subsequently sold. The O2 Slovakia business included in the deal has been part of the company since 2014.

The stake sale to e& is expected to close before the end of Q1 2024.

e& financials
In its Q2 earnings statement, e& chair Jassem Mohamed Alzaabi described the PPF agreement as a “strategic expansion into the European market” highlighting it as the “next step in our transformation into a global technology group”.

Recently, e& has also been building its stake in Vodafone Group as part of this ambition.

Net profit of AED2.5 billion ($681 million) was up 3.8 per cent year-on-year, credited to higher income from associates, a boost in net finance income, lower charges and a decline in expenses.

Revenue was AED13.6 billion, up 4.8 per cent.