The German company Rheinmetall has agreed to buy a 25.12% stake in Hungary’s 4iG.
The transaction, through a share purchase and capital increase, will make it the largest international investor in the IT and telecommunications group.
The closing of the deal is conditional on the approval of the new articles of charter and supervisory board by the general meeting of 4iG, and the consent of the Ministry of Interior to the acquisition of Rheinmetall AG under the law on the acquisition of foreign companies.
According to the agreement, Rheinmetall will purchase 4iG shares from KZF Vagyonkezel? in an OTC transaction. The German company will also participate in a multi-phase private equity offering worth a total of HUF125 billion, in which, in line with the preliminary announcement of the transaction last November, iG COM Private Equity Fund, Gellért Jászai’s interest, and a fund managed by Alpac Capital will participate alongside Rheinmetall. The capital increase by share premium will be carried out by placing 4iG shares with an issue value of HUF670.
As a result of selling the share package, and the capital increase, Gellért Jászai’s indirect ownership in 4iG Plc will be reduced from 56.85% to 50.22%, so his influence over the company will not change significantly.
Commenting on the transaction, Gellért Jászai, chairman and CEO of 4iG, said: “The agreement with Rheinmetall opens up new horizons in 4iG’s growth strategy. The strategic investment by the German company and the institutional fundraising announced today will further increase the capital strength of our group, providing a solid basis for further domestic and international expansion. The partnership will also open up new opportunities for cooperation with Rheinmetall’s network in Hungary and Western Europe, which will allow us to become a global IT service provider in a few years.
“The investment by one of the world’s leading defence and automotive company is an important confirmation of the soundness of our strategy and recognition of Hungarian IT expertise, which is of outstanding value in international markets. The transaction will enable 4iG to become one of the leading IT and telecommunications companies in the region, alongside Hungary, in a short time”.
Armin Papperger CEO of Rheinmetall, added: “Our participation in 4iG is an integral part of Rheinmetall’s digitization strategy. But it is also a token of our special commitment to Hungary. In recent years, Rheinmetall has made great strides in internationalizing its operations, meaning that we have now gained new domestic markets in the United Kingdom, Australia and Hungary in addition to Germany, our original home market. In these and other Western countries, Rheinmetall is actively creating local production and R&D capacity, enabling us to offer as complete an array as possible of top-of-the-line defence technology products and services”.
In accordance with the Hungarian legislation on strategic sectors, which protects Hungary’s security interests, foreign ownership can be acquired with the permission of the Ministry of Interior.
