Vodafone Greece takes majority stake in Hellas

Vodafone has agreed to acquire a majority holding in Greek fixed line operation Hellas Online. The company will purchase 72.7 per cent of the share capital from Intracom Group and World Equities Investments for €72.7m. Vodafone Greece already holds 18.5 per cent of Hellas Online, with the most recent transaction taking its ownership to 91.2 per cent.

Hellas offers broadband and fixed-line telephony services in Greece with around 519,000 customers as at 31 December 2013, representing a market share of approximately 11 per cent.

According to Vodafone the deal will create a business with a number two market position in terms of revenues in both fixed line and mobile communications in Greece, with scale, management expertise, products, services and funding needed to compete more effectively in the Greek telecommunications market.

Vodafone expects to achieve cost and capex synergies with an annual run-rate of €24m before integration costs by the third full year post completion, equivalent to a net present value of approximately €135m after integration costs. These synergies are expected to be realised from sharing network and IT infrastructure, savings on marketing and bill collections, and rationalisation of overlapping functions.

The Greek communications industry is ripe for consolidation at present with a battle for control of Greece’s leading alternative fixed line operator, Forthnet, which also owns pay TV operator Nova, breaking out earlier this year. Vodafone Greece joined forces with Wind Hellas to try and take control of the company. It now appears shoring up of existing investments is a more amenable strategy.