Norwegian telecoms company Telenor sells eastern European assets to PPF Group

[Damian0358]

>Norwegian telecommunications operater Telenor on Wednesday said that it is selling its mobile operations in Bulgaria, Montenegro, Serbia and Hungary, as well as the technology service provider Telenor Common Operation. The assets will be sold for €2.8 billion [$3.4 billion] to the international investment fund PPF, based in The Netherlands and owned by Czech billionaire Petr Kellner, the wealthiest person in Czech Republic. A joint Telenor and PPF statement calls PPF Group the largest private investment group in Central and Eastern Europe, with approximately €35 billion of assets under its control.

>The PPF Group invests in various sectors, including banking, consumer finance, real estate, mining and telecommunications. Its previous transaction experience includes the acquisition of O2 Czech Republic from Telefonica in 2013 and Nova Broadcasting Group in Bulgaria in 2018.

Balkan Insight

>“With the sale of our CEE assets, we take an important step in simplifying and focusing Telenor’s portfolio on the regions where we see the strongest potential for value creation,” Chief Executive Sigve Brekke said in the statement. “Following this transaction, Telenor’s footprint will consist of integrated fixed and mobile operations in Scandinavia, and strong mobile positions in Asia.”

>Prior to the deal, Telenor had operations in 12 countries, including three in the Nordics, five in Asia and the four in central and eastern Europe, with a combined 176 million customers. PPF said it aims to complete the transaction in June, adding that the acquired units would retain the right to use the Telenor brand until mid-2021. “PPF Group is expanding its telecommunications portfolio to four more countries, and fulfilling our long-held goal to become a mid-sized European operator and to use our experience to strengthen our market position,” said Ladislav Bartonicek, PPF’s shareholder responsible for telecommunications.

Reuters

>Headed by Chief Executive Officer Sigve Brekke, Telenor has sold its online classifieds operations in Latin America, reduced its stake in operator Veon Ltd. and exited India, in efforts to streamline its portfolio and free up resources for investments in growth markets such as Thailand and Bangladesh. The company has also used buybacks and dividends to send cash back to investors, and plans to pay a special dividend of 4.40 kroner a share after the divestment announced Wednesday.

>Telenor began considering a sale of the businesses two months ago, when it said it had received takeover interest for the units. While the deal values them about 14 percent lower than consensus estimates, the strategic rationale for the divestment is “sound,” JP Morgan analyst Roman Arbuzov said in a note.

>PPF is the largest private investment group in central and eastern Europe, with about 35 billion euros of assets as of June 2017. In 2014,
it entered the telecom sector by buying the largest operator in the Czech Republic from Telefonica SA for about $3.4 billion.

Bloomberg