Hungarian State Strikes Deal of the Decade with Vodafone

Corvinus Nemzetközi Befektetési Zrt. will acquire a 49 percent stake in Vodafone Hungary on behalf of the Hungarian state, Minister of Economic Development Márton Nagy announced on Monday. Vodafone Hungary said that they are committed to providing an excellent customer experience and to Hungary’s digital development, and its services will continue to operate in full and with the usual high quality.

As Hungary Today reported earlier, the Minister of Economic Development announced last August that the government intends to buy stake in the telecommunication company. Now the deal has finalized, and Corvinus Nemzetközi Befektetési Zrt., Antenna Hungária Zrt. (a subsidiary of 4iG Nyrt), and Vodafone Europe BV have signed an agreement to acquire Vodafone Hungary Telecommunications Zrt. According to the announcement, the HUF 660 billion (EUR 1.66 billion) transaction will give Antenna Hungária a 51 percent stake, while Corvinus Zrt. will acquire 49 percent indirect ownership of the second largest Hungarian telecommunications company from Vodafone Europe BV.

The deal is described as the largest corporate acquisition in the post-communism period in Hungary.

“In an economic situation hit by war and sanctions, we must not give up on further strengthening Hungary’s competitiveness and independence. The government’s priority is to ensure that, following the banking sector, the energy sector and the media sector, majority national ownership is established in sectors of national strategic importance such as insurance and telecommunications. This is the purpose of the acquisition of Vodafone Hungary, which will further strengthen the sovereignty of our country,” said Economic Development Minister Márton Nagy in his statement.

The acquisition will create a Hungarian-owned, market-leading, “national champion” group of companies in the Hungarian telecommunications sector that can contribute to improving the country’s competitiveness in the face of the digital challenges of the 21st century and provide outstanding, high-quality services to residential and corporate customers. At the same time, according to the statement,

the transaction will help to increase competition in the market, reduce costs, and further improve service quality, thereby providing additional benefits to customers.

Vodafone Hungary is the second largest player in the Hungarian telecoms market, providing mobile, TV, broadband internet, and fixed telephone services to more than 3.8 million residential and business subscribers, and employs more than 3,000 people.

The acquisition has attracted interest at national and international levels. Reuters reported that the deal could also consolidate Prime Minister Viktor Orbán’s control over the telecoms sector. Opposition parties in Hungary have criticized the buyout, saying it was a bad deal for the government at a time when energy and food prices are skyrocketing and teachers’ salaries have not yet been settled as planned.

A senior analyst at the Center for Fundamental Rights pointed out, however, that every Hungarian should know that the acquisition of a large company like Vodafone “has made our common country stronger and we, as Hungarians, richer.” On his Facebook page on Monday, Tamás Pindroch wrote that a country is sovereign and capable of action if it can stand on its own feet in the economy.

If the French state can own water utilities and energy providers even in other countries, the Hungarian state also has a natural right to have a stake in the telecommunications sector, which is also important in terms of national security and 21st century technology.

According to Pindroch, the opposition parties do not agree with the acquisition, because they have sold everything before, including Budapest Ferenc Liszt International Airport (formerly known as Ferihegy Airport), which the Fidesz government intends to buy back. The analyst also pointed out that the opposition parties also disapproved when the state decided to buy back Hungarian oil and gas company MOL, now a great asset to the Hungarian economy, during the energy crisis.

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