Telenor has entered into an agreement to sell its assets in Central and Eastern Europe (CEE) to PPF Group for USD 3.46 billion on an enterprise value basis, said a statement issued by the group.
The transaction includes Telenor’s wholly-owned mobile operations in Hungary, Bulgaria, Montenegro and Serbia as well as Telenor Common Operation, its technology service provider.
The CEE operations contributed approximately USD 1.54 billion or 9% of Telenor Group’s revenues and USD 550 million or 8% of EBITDA in 2017. They have served more than 9 million customers with a workforce of 3,500 employees.
“Telenor Group’s strategy is based on growth, efficiency and simplification. 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. Following this transaction, Telenor’s footprint will consist of integrated fixed and mobile operations in Scandinavia, and strong mobile positions in Asia. Telenor is confident that PPF Group’s experience in both the region and sector will make it a good owner of the CEE assets,” says Sigve Brekke, Chief Executive Officer of Telenor Group.
The Board of Directors will ask the upcoming AGM on 2 May 2018 for the power of attorney to pay out a special dividend of USD 0.57 per share, contingent upon the successful closing of the transaction.
Including the proposed ordinary dividend of USD 1.05 per share for 2017, the total proposed pay-out to shareholders in 2018 will be approximately USD 2.47 billion.
The agreed transaction price corresponds to an EV/EBITDA multiple of 6.4 based on 2017’s EBITDA.
The parties have agreed on a deferred purchase price, where USD 500 million of the proceeds will be paid in four installments over four years.
The transaction requires necessary regulatory approval. It is expected to be completed within Q3 2018.
Telenor has had mobile operations in the CEE region for 25 years. The company entered the Hungarian market in 1994 through its acquisition of Pannon. It later expanded its presence in the region through the launch of mobile services in Montenegro in 1996 and the acquisition of Mobi 063 in Serbia in 2006. Finally, Telenor acquired Globul in Bulgaria in 2013.