Mobile phone giant Vodafone has finalised a deal to sell its Hungarian business for £1.5 billion amid an ongoing overhaul.
The group, which first announced the plans in August, confirmed a binding agreement to sell Vodafone Hungary to local technology company 4iG and the Hungarian state for 660 billion Hungarian forints (£1.5 billion), with the sale proceeds being used to pay down debt.
It comes as Vodafone searches for a new chief executive after former boss Nick Read was ousted at the end of last year, with reports suggesting the board was unhappy with his progress in boosting the firm’s performance and flagging share price.
During Mr Read’s four-year tenure, Vodafone has been selling off chunks of the business to focus on its core European and African business, with the Hungary sale the latest such deal.
But it is also slashing costs, with the former chief executive last month warning over job losses and price hikes for customers as it trimmed its profit guidance range for the full-year and posted a 3% drop in interim earnings.
Chief financial officer Margherita Della Valle has taken over as interim chief executive while the group hunts for a permanent replacement at the top.
The Hungarian division sale fits in with the hopes of the Hungarian government to create a large locally owned telecommunications giant.
After the purchase, 4iG will be the second biggest mobile and fixed communications company in Hungary.
Ms Della Valle said the deal “establishes a scaled converged operator across mobile and fixed communications and supports the Hungarian government’s goal of creating a national information and communications technology champion”.
“The combined entity will increase competition and accelerate investment in the ongoing digitalisation of Hungary,” she added.
The sale is expected to complete later this month.