e& is acquiring PPF Telecom’s infrastructure division, CETIN, which will increase operational effectiveness and help generate income constantly.
The telecom giant e& (formerly known as Etisalat), located in the United Arab Emirates, is expanding its presence in Central and Eastern Europe (CEE) through a significant €2.3 billion ($2.3 billion) agreement.
They are buying a significant share of PPF Telecom Group’s holdings in Bulgaria, Hungary, Serbia, and Slovakia. It helps Abu Dhabi to expand into international markets, improve its operational capabilities, and become resilient by being part of the competitive European telecom industry.
After the acquisition, the company can increase its power and influence in a strategically important area.
It will help Abu Dhabi enter into global markets by investing in industries like telecoms. It also shows that the company is committed to grow and expand.
e& is acquiring PPF Telecom’s infrastructure division, CETIN, which will increase operational effectiveness and help generate income for the companies.
Some reports show that Yettel, O2, and CETIN generated almost two billion euros in 2023. It shows that they have a stable financial performance with an EBITDA (earnings before interest, taxes, depreciation, and amortization) margin of about 44%.
The structure of this acquisition is milestone-based incentives, and PPF might get up to 350 million euros in rewards if they are performing and reaching their targets and up to 75 million euros in clawbacks if they are not.
e& and PPF hope to gain substantial potential for synergies between the two organizations with considerable opex and capex savings and many chances to introduce the top suite of e&’s B2B and B2C digital products throughout Central and Eastern Europe.
This acquisition helps strengthen e& to expand internationally and offers many significant advantages. When e&’s reaches 32 countries and adds four new markets, it opens the door to grow further in Europe. e& and PPF will get significant operational and capital expenditure reductions, and e& intends to use PPF Telecom’s infrastructure to launch its B2B and B2C digital goods in Central and Eastern Europe.
PPF Telecom CEO Balesh Sharma will continue to be a CEO and run his current teams to guarantee operational stability. Both businesses have confirmed that they will remain operationally and financially resilient and maintain PPF Telecom’s current rating level after the deal.
Jassem, H.E. Obaid Mohamed e& chairman Bu Ataba Alzaabi offered his thoughts on the company’s acquisition move to enter the European market. He added that they are collaborating with PPF to enter the international market in Central and Eastern Europe and beyond. He continued to say that it is the next phase in turning e& into a global technology company, providing many ways to introduce its digital products in the Central and Eastern Europe (CEE) area.
This €2.3 billion acquisition of PPF Telecom Group assets is one of the largest transactions in European telecom history. For example, Vodafone purchased Mannesmann in 2000 for $183 billion. Other noteworthy transactions include the €8 billion purchase of Vodafone Italia by Swisscom, the €6 billion Orange-Masmovil merger, and the $22 billion proposal by KKR for Telecom Italia’s fixed network.
Telefónica purchased O2 for €25 billion. e&’s acquisition will help to set its footprint in Central and Eastern Europe, which shows a trend of telecom industry consolidation in Europe.
This acquisition aligns with e&’s goal of making its global footprint through technological investments. Between 2024 and 2026, the company promised to invest $6 billion to improve digital economies in 16 countries.
e& has a net profit of AED 10.0 billion in 2022, which shows it is profitable. The business keeps a solid EBITDA (earnings before interest, taxes, depreciation, and amortization) margin of 50%, one of the greatest in the telecom sector. e& is dedicated to growing steadily and providing long-term value for its clients and shareholders through a clear vision and wise investments.
