TLDR:
• Boosting global reach with Europe buy
• Strategic partnerships fuel growth
• e& explores Ethiopia telecom potential
ABU DHABI (The Thursday Times) — UAE-based telecom giant e& has officially acquired a controlling stake in assets of PPF Telecom Group in Bulgaria, Hungary, Serbia, and Slovakia, following through on its expansion drive across Europe. The $2.3 billion deal places e& Group, also known as Etisalat, at the forefront of Abu Dhabi’s push into foreign markets, positioning it to boost resilience and operational scale by entering the competitive European telecoms landscape.
Scaling operations in Europe
With this acquisition, e& has extended its influence in a strategically pivotal region. Operating under the brand names Yettel and O2, the newly formed “e& PPF Telecom” aims to capture over ten million customers across Bulgaria, Hungary, Serbia, and Slovakia. The acquisition brings the company’s commitment to growth into sharp focus, underscoring Abu Dhabi’s increasing clout in international markets through investments in critical sectors like telecommunications.
In this latest transaction, e& acquired the infrastructure arm CETIN, which will bolster e& PPF Telecom’s operational efficiency and drive reliable revenue generation. The combined entities of Yettel, O2, and CETIN reportedly generated approximately two billion euros in revenue in 2023, marking a steady financial performance with an EBITDA margin of around 44 percent. The structure of this acquisition includes milestone-based incentives for PPF, with potential payouts of up to 350 million euros if it hits performance goals, and a clawback provision of up to 75 million euros if it falls short.
Consolidating financials under e& International
As e& continues to solidify its global footprint, the financials of e& PPF Telecom will be folded into the e& international vertical from November 2024. The Abu Dhabi-listed telecom major has set a precedent for its ambitious international plans, not only with its initial foray into Europe through Vodafone but also by exploring options in markets closer to home.
With a market capitalisation of 148 billion dirhams, e& is among Abu Dhabi’s leading overseas investors, alongside sovereign funds. The company’s recent moves reveal a strategy focused on both securing new growth avenues and enhancing its portfolio’s stability. In the first half of 2024, e& posted a nearly 17 percent increase in profit, spurred by a rise in its subscriber base and successful partnerships. Its half-year revenues also rose by six percent, reaching 28.3 billion dirhams.
Emerging markets
e& has steadily built a diverse portfolio in telecommunications, reinforced by notable partnerships and investments. In May 2023, the group expanded its strategic alliance with Vodafone, after first investing in the British telecom giant in 2022. In addition, it has engaged with leading technology and telecom firms in the Middle East and beyond, purchasing a stake in Careem’s super app in 2023 and eyeing increased investments in Mobily, Saudi Arabia’s telecom leader.
The company is reportedly contemplating moves in other key markets, including potential investments in Ethiopia’s state-run telecom operator and Vodacom, South Africa’s largest mobile operator. These decisions indicate a broader strategic push to capture diverse markets in telecommunications, aligning with Abu Dhabi’s goals of global economic diversification and robust investment returns.
