Norway’s Telenor said on March 21 that it has agreed to sell its Central and Eastern European (CEE) telecommunications business, which includes Telenor Bulgaria, to Czech investment conglomerate PPF Group for 2.8 billion euro.
Telenor’s CEE operations across four countries – Bulgaria, Hungary, Montenegro and Serbia – accounted for nine per cent of the group’s revenue in 2017 and eight per cent of its earnings before interest, tax, depreciation and amortisation.
“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,” Telenor CEO Sigve Brekke said in a statement.
The deal, which is subject to regulatory approval, is expected to be finalised in the third quarter, Telenor said, while PPF Group estimated, in a separate statement, that it would be completed in June.
Telenor exits Bulgaria five years after acquiring Greek telecom Cosmote’s subsidiary Globul, which it later rebranded as Telenor Bulgaria. The Bulgarian carrier is likely to keep its name for some time, as PPF Group secured the rights to use the Telenor brand through the first half of 2021, similar to the agreement it struck when it bought the O2 subsidiary in the Czech Republic in 2013.
The deal will see PFF Group expand its telecoms portfolio significantly, adding the four markets to its current operations in the Czech Republic and Slovakia, which would fulfil the group’s “long-held goal to become a mid-sized European operator and to use our experience to strengthen our market position,” said Ladislav Bartoníček, PPF Group’s shareholder responsible for telecommunications assets within the group.
It is also the second major acquisition in Bulgaria for PFF Group, controlled by billionaire Petr Kellner. Last month, PFF Group announced that it agreed to buy the majority stake in Bulgarian broadcaster Nova Broadcasting Group from Nordic Modern Times Group (MTG).