Vodafone shares dipped 0.5% to 121.1p in early morning trading on Monday after the company announced a non-binding agreement for the sale of Vodafone Hungary for €1.8 billion to 4iG and Corvinus.
The deal is set to support the Hungarian state’s aim to create a national Information and Communications Technology (ICT) champion.
However, Vodafone’s shared services business VOIS is not penned for inclusion in the transaction, and will continue to provide services to its other operating companies.
Vodafone reported its Hungarian business, which is currently one of the leading converged network operators in the country, would become the second largest operator across mobile and fixed communications after its merger with 4iG.
The company highlighted its Hungarian sector’s combination with 4iG would create a stronger competitor to the incumbent operator.
“The Hungarian Government has a clear strategy to build a Hungarian owned national champion in the ICT sector,” said Vodafone CEO Nick Read.
“This combination with 4iG will allow Vodafone Hungary, which has a proud history of success and innovation in the country, to play a major role in the future growth and development of the sector as a much stronger scaled and fully converged operator.”
“The combined entity will increase competition and have greater access to investment to further the digitalisation of Hungary.”
The agreement is set to close pending due diligence, binding transaction documentation and regulatory approval.
Vodafone confirmed an intended completion date by the end of FY 2022.
