The upcoming acquisition of the Polish telco Play Communications by France’s iliad is undoubtedly an important development.
News that Play’s board had agreed to an offer to acquire 100% of shares in the company for €2.2 billion broke on September 21. At the same time, it was announced that iliad had already entered into a binding agreement with two of Play’s current shareholders – Thor Bjorgolfsson and Panos Germanos – to buy a controlling stake of 40%. All told, the proposed transaction gave Play an enterprise value of around €3.5 billion.
Interestingly, Play also revealed that it had a received a nonbinding offer from iliad as far back as August 10 but decided not to disclose it for fear that this could adversely affect the outcome of the transaction and create uncertainty about the company’s future.
Now that everything is out in the open attention has turned to the implications of the deal. For iliad, it will mark the company’s first foray into Central and Eastern Europe, its interests having until now been confined to France, where it operates Free and has a total of 20 million subscribers, and Italy, a market in which it currently has 6 million customers. Majority owned by its founder Xavier Niel and employees, it had revenues of €5.3 billion in 2019 and following the acquisition of Play will, according to its general manager Thomas Raynaud, become Europe’s sixth largest telco.
Meanwhile, Play is the leading mobile operator in Poland, with a market share of 29% and 15 million subscribers. It is also present in the country’s TV market through the OTT service Play Now TV.
Much is being made of iliad’s and Play’s similar backgrounds and how they came from being outsiders, and indeed latecomers, to leading players in their respective markets. There is also speculation that iliad will not stop at Play and seek further acquisitions in Poland.
What is most likely, however, is that this transaction, should it receive clearance from the European Commission, will benefit the Polish telecom market and its consumers.
