Online Investment Investment News Hungarian authorities buy local Vodafone business for $1.8 billion

Hungarian authorities buy local Vodafone business for $1.8 billion


British group agreed to sell Hungarian business to the Hungarian state and local IT company 4iG

The deal, scheduled to close as early as this month, comes at a time when Vodafone is looking for a new chief executive after the board expressed dissatisfaction with the progress made by Nick Reed, who failed to expand the group or strike the right agreements to consolidate the fragmented European telecommunications market.

The proceeds from the sale are to be used to pay down debt.

Once one of the world’s largest mobile operators is selling assets to focus on its core operations in Europe and Africa.

According to acting group director Margherita Della Valle, the sale will increase competition in the telecom market in Hungary.

The deal would strengthen Prime Minister Viktor Orban’s control of the telecommunications sector. 4iG is expected to hold a 51 percent majority stake, while the state will hold a 49 percent stake.

Orban has expanded his nationalist government’s influence in areas such as energy, banking and media, and now telecommunications, Reuters noted. The sale is scheduled to be completed later this month.