Hungary's 4iG signs new deal to acquire Israel's Spacecom

Hungary's 4iG signs new deal to acquire Israel's Spacecom
Israel's defence ministry had blocked 4iG's takeover due to concerns over the ties between it and the Hungarian government. / bne IntelliNews
By Tamas Csonka in Budapest September 30, 2022

Acquisitive Budapest-bourse listed IT company 4iG has signed a new contract to acquire a 51% stake in Israeli satellite company Space-Communication over a period of several years. Under the contract, which replaces one signed close to a year earlier, 4iG can acquire a 20% stake in Spacecom in public offerings or private placements as a "first step".

Three years after the acquisition of the 20% stake, 4iG may boost its holding in Spacecom by an additional 31%, pending approval by shareholders and clearance from Israel's Ministry of Communications.

4iG noted that the Ministry of Communications issued approval for its acquisition of a 20% stake in the Israeli company in August, more than half a year after the country’s defence ministry  blocked the deal due to concerns over the ties between 4iG and the Hungarian government. 

According to earlier press reports, concerns were raised by the Israeli security agency Shin Bet about a foreign company controlling Spacecom’s Amos satellites, which are also used by Israel’s security services.

Spacecom operates the AMOS fleet of four geosynchronous satellites, offering broadcast and broadband service.  

Spacecom's AMOS 3 satellite leases the geostationary orbit held by Hungary under an agreement that will expire in 2024. CarpathiaSat, a 4iG group member, holds the rights to the orbit for a 20-year period from 2024.

Over the years, 4iG  has grown from a small IT company to an ICT giant through a string of acquisitions in Hungary and abroad, creating a leading telecommunication group in the CEE and SEE region. In Hungary it is the leader in fixed line, internet, cable, and digital terrestrial broadcasting. The company is majority-owned by Gellert Jaszai, the right-hand man of Hungary’s most powerful oligarch Lorinc Meszaros.

First-half net sales of the company jumped 279% y/y to HUF122bn (€290mn) on acquisitions and net profit came to HUF1.6bn, up 226% from a year earlier.

Last month, 4iG and the Hungarian state entered into a non-binding heads of terms with the Vodafone Group to acquire 100% of the telco's Hungarian unit. The transaction would give 4iG 51% of Vodafone Magyarorszag and the state a 49% stake.