The sale of Digi Communications’ assets in Hungary is something of a watershed moment for the company.
Earlier this week it was announced that following the completion due diligence, Hungary’s 4iG has agreed to buy the assets for €625 million. The transaction, which was first announced in March this year, is now expected to be finalised next month subject to the approval of the Hungarian Competition Authority (GVH).
In Romania the sale has been reported as the largest M&A of a Romanian company outside the country, as well as the largest Romanian transaction of 2021. It resulted in the value of Digi shares in Bucharest initially rising by 20% and as of the end of Thursday, December 2 the company’s capitalisation stood at over RON4 billion (€807 million), up from RON3.6 billion only four days earlier.
While this may look all well and good, Digi’s exit from Hungary – a market in which it has been present for 23 years – was in large part forced. It also made the company reassess its strategy, shifting the focus to West European markets. These include Portugal, where its subsidiary Dixarobil Telecom was awarded 5G licences by the regulator ANACOM two months ago.
5G was in fact probably the straw that broke in the camel’s back in Hungary, where Digi was not only excluded from taking part in an auction but subsequently lost a court case against the regulator NMHH. Earlier, Digi also faced a number of obstacles before eventually being allowed to buy Invitel, then the country’s leading alternative telco.
The sale of Digi’s Hungarian assets to 4iG is being undertaken through its Romanian operation RCS&RDS and Romania will undoubtedly remain its main focus of attention. Indeed, it is still the country’s leading provider of pay-TV services, with just over 5 million subscribers at the end of September, in what is a highly competitive market.
For Digi Hungary, on the other hand, next year will mark the start of a new phase in its history.
For more information about Chris Dziadul, please visit https://www.chrisdziadul.com
