Vivendi Universal, the French utility group currently streamlining its operations through a sale of diverse assets, is set to announce the disposal of its Hungarian telecom operations to a UK-US private equity consortium.
AIG Global Investment, the private equity arm of US insurer AIG, is investing via its AIG Communications fund alongside GMT Communications Partners, a UK private equity firm specialising in telecoms and communications investments . Combined, they are expected to pay around E400m for the business, with confirmation of the deal expected this week.
Vivendi Telecom Hungary operates around twelve per cent of the country's fixed telephone lines. The unit is Hungary's second largest fixed-line telecoms service provider and has half a million subscribers and more than 20,000 business customers. Incumbent operator Matav remains the dominant player in the Hungarian market, with a 79 per cent share.
GMT’s latest fund, closed in November 2000, has a capital base of E365m. Recent investments by GMT include a E50m investment in German cable operator PEPcom in November. On that occasion the firm allied itself with New York-based investment bank Veronis Suhler Stevenson. The firm’s portfolio also includes telecoms investments in the Czech Republic, Romania and Slovenia.
AIG established its presence in alternative investments in 1980 and in 1990, the firm set up its first group to pursue such investments. It currently manages $20bn of committed institutional assets in several alternative investment strategies that include private equity, direct investment funds, mezzanine finance and fund of funds.
Private equity firms have thus far proved to be willing acquirers of Vivendi assets. In November, Thomas H Lee Partners and Bain Capital paid $1.66bn for the group’s US publishing division Houghton Mifflin. A fortnight earlier French publishing house Lagardère and US private equity fund Ripplewood Holdings agreed to pay E1.25bn for Vivendi’s non-US assets.
Vivendi Universal has so far declined to comment on reports that an announcement of the deal is expected this week. According to the company's website, “no statement or comments will be made on disposals before their completion.”