Two interesting reports concerning Hungary’s electronic communications industry have appeared in the last fortnight.
The first, which can probably best be described as a market rumour, was that Deutsche Telekom had received a bid of €2 billion for Magyar Telekom. However, it was not clear if this amount valued the Hungarian telco as a whole at €2 billion, or only Deutsche Telekom’s 59.21% stake. In any case, any prospective buyer would also have to make a binding offer for the remaining 40.79% in the company.
Although there has also recently been talk, perhaps more substantive, of Deutsche Telekom selling Telekom Albania – controversially, in this instance, to Telekom Srbija – it is unlikely, at least in my view, to exit the lucrative Hungarian market anytime soon.
Meanwhile, the second report concerned the Romanian-owned Digi and its bid to buy the leading Hungarian alternative telco Invitel’s retail and small business interests. Though not a game changer, it will certainly impact on an electronic communications market in which Magyar Telekom, UPC Hungary and Digi are the leading players.
The €140.8 million deal was announced as far back as July 2017 and approved by the Hungarian Competition Authority (GVH) this May. However, almost out of the blue, the GVH announced earlier this month that it had withdrawn its permission on the grounds of a “misleading disclosure” by Digi. At the same time, it imposed a fine of €280,000 and initiated a new investigation into the transaction.
Significantly, the GVH has also allowed the merger of the two companies to continue whilst it carries out the investigation. This should ensure continuity for the services they offer their customers.
Earlier this week, in what was an unusual development, Digi issued a press release in English in which it said it disagreed with GVH’s decision and strongly upheld that it “acted in good faith and provided complete and accurate information during the main procedure”. It also stressed that it would “fully cooperate with GVH in good faith in this new investigative process, so the new resolution re-approving the transaction can be issued as soon as possible”.
It will be interesting to see if GVH does indeed give its approval, for the second time, to this important deal.
