Telecom Takeovers Sweep Across Eastern Europe as Gulf Investors Flex Financial Muscle

By Velizar Velikov, Head of M&A Database at EMIS

The telecom sector in Eastern Europe has emerged as the hottest arena for dealmaking, with deep-pocketed investors from the Persian Gulf leading the charge. Last year saw a resurgence of large transactions in the industry, totaling a staggering EUR 6.8bn in value – more than any other sector.

The driving force behind this M&A frenzy? Substantial investments from Gulf-based players, who have capitalized on private equity firms exiting the region to establish a strong foothold.

In one of the region’s biggest deals of 2023, the UAE’s Emirates Telecommunications Group (e&) acquired a controlling 50% stake in PPF Telecom’s assets across Bulgaria, Hungary, Serbia, and Slovakia for up to EUR 2.5bn. Another major transaction involved Saudi Telecom Company’s (STC) subsidiary TAWAL, which snapped up the mobile tower infrastructure of BC Partners-backed United Group in Bulgaria, Croatia, and Slovenia for EUR 1.2bn.

This acquisition spree looks set to continue in 2024. Reuters reports that STC is considering a bid for the entire United Group, which operates telecoms and media assets across the Balkans. Industry sources suggest the deal could value the Dutch-based company at around EUR 8bn, including debt. Earlier rival e& was also rumored to be evaluating a similar move for the Balkan telecoms giant.

The M&A momentum doesn’t end there. Turkey’s Turkcell is expected to complete the sale of its Ukrainian telecom assets to French billionaire Xavier Niel’s NJJ Capital for an enterprise value of EUR 575mn later this year. And in a sign that local players are also getting in on the action, Greece’s OTE (part of Deutsche Telekom) recently agreed to offload Telekom Romania Mobile to a domestic investor group.

Amidst this backdrop of heightened M&A activity, the telecom industry’s financial prowess is on full display. Bite Group, a Baltic telecoms and media conglomerate, successfully raised EUR 920mn through a senior secured note placement – showcasing the sector’s ability to attract substantial investment.

As the dust settles, one thing is clear: Eastern Europe’s telecom landscape is undergoing a seismic shift, with cash-rich Gulf investors leading the charge and reshaping the regional dynamics.

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