Eir owner Iliad plans to snap up Poland’s Play for €2.2bn

21 Sep 2020

Image: © Claudio Divizia/Stock.adobe.com

With the acquisition of Play Communications, Iliad will become the sixth-largest telecoms mobile operator in Europe.

On Monday (21 September), French telecoms business Iliad announced plans to acquire Polish mobile network operator Play Communications in a €2.2bn deal.

Iliad, which is the parent company of Irish telecoms company Eir, is run by French billionaire Xavier Niel. According to Bloomberg, the acquisition of Play is part of Niel’s ambition to accelerate Iliad’s expansion in Europe.

Iliad has agreed to buy 40pc of Play from two controlling shareholders, at a 39pc premium to Play’s closing share price on Friday. According to Reuters, the acquisition will make Iliad Europe’s sixth-largest mobile operation.

The acquisition

Founded in 2007, Play is the youngest of Poland’s four largest mobile network providers. It competes with Orange SA, Deutsche Telecom AG and Cyfrowy Polsat’s operator, Plus. Earlier this year, Play agreed to buy Virgin Mobile’s Polish operations for €13.4m.

Iliad said that the purchase of Play, which is the company’s third venture beyond France after the acquisition of Eir in Ireland and an Italian launch in 2018, gives Play an equity value of €2.2bn and an enterprise value, including debt, of €3.5bn.

Iliad CEO, Thomas Reynaud, said: “This excellent alliance constitutes a new growth driver for the Iliad Group and gives it access to one of Europe’s high-potential telecom markets. Pooling the expertise of Play’s and Iliad’s teams will reinforce the Iliad Group’s fundamentals through a combination of growth and innovation.”

Within the last year, Play’s earnings hit €523m and the company reached revenues of €1.6bn. The firm has 2,800 employees and 15m subscribers in Poland.

The CEO acknowledged that there are significant growth opportunities in the Polish telecoms market, as the country has a population of 38m. With the addition of Play, Iliad will have 41m subscribers between its operations in France, Poland and Italy.

Haitong Bank analyst Konrad Ksiezopolski told Bloomberg that Iliad could be interested in further deals in Poland, such as fixed-line assets. Iliad said that it aims to be the “best industrial partner to accompany Play’s growth in the mobile market” while optimising the company’s entry to the fixed market.

Jean-Marc Harion, chair of Play’s management board, said: “Play and Iliad share the same values and overall corporate vision. Our board of directors has unanimously approved the deal, firmly convinced of its strategic fit and value creation potential for Play’s shareholders.”

The deal, which is subject to regulatory clearance, is expected to close at the end of November.

Updated 6:30pm, 21 September 2020: This article was amended to clarify that Play agreed to acquire Virgin Media’s Polish operations earlier this year, rather than Plus, as previously stated.

Kelly Earley was a journalist with Silicon Republic