SERBIA Trends and Developments Contributed by: Miodrag Jevtić, Gecić Law
bly diversified, with Serbia attracting more than half of total FDI to the Western Balkans region in recent years. The robust FDI trend underscores Serbia’s acquisition attractiveness and creates a competitive environment for acquisition financ- ing. In October 2024, Standard & Poor’s upgraded Serbia’s credit rating to investment grade (BBB-) for the first time in the country’s history. Lastly, the reduction in unemployment rates and growth in labour productivity are likely to con- tinue boosting investor confidence. Overall, Serbia’s macroeconomic environment is showing signs of recuperation and improvement, paving the way for an increase in the volume of acquisitions and, thus, in acquisition finance. M&A Market Dynamics Despite global declines in M&A activity, the Ser- bian market has seen several notable acquisi- tions, the most prominent being telco business. Many of these involved foreign investors and multinational corporations seeking to gain a foothold in the region or strengthen their exist- ing positions. Major telecom and media consolidation in Serbia: PPF Group and Telekom Srbija transform the market In early 2025, United Group reshaped Serbia’s telecommunications and media landscape in a landmark move, executing two major divest- ments with a combined enterprise value of EUR1.5 billion. This underscored the region’s appeal to foreign investors and the intensifying competition among domestic players. PPF Group, through its subsidiary e& PPF Tel- ecom Group, acquired 100% of Serbia Broad-
band (SBB) from United Group for EUR825 million, marking one of the largest deals in the Western Balkans. This acquisition enabled e& PPF Telecom to integrate SBB’s extensive fixed broadband and pay-TV services with its local mobile operator, Yettel, creating a converged market leader poised for significant growth and enhanced service offerings in Serbia. In terms of financing, e& PPF publicly stated that the acquisition of SBB was concluded on a cash- free and debt-free basis and that it financed the acquisition purely through raising external debt. It is not publicly known what debt financing structure was employed. External debt financing indicates that owners or affiliates did not provide financing for the deal. Public data from Serbian companies’ registers show no collaterals on the shares or assets of SBB relatable to the subject acquisition, indicating that no leveraged buyout employing the target’s assets was used. As part of the same strategic transaction, SBB’s direct-to-home satellite operations in Serbia and North Macedonia were carved out and sold to Telekom Srbija, the country’s leading telco oper- ator. Telekom Srbija also acquired Eon TV Inter- national Ltd, which operates NetTV Plus, a lead- ing IPTV platform targeting Serbian and ex-Yu diaspora with ethnic content. Coupled with the acquisition of sports broadcasting rights, Tele- kom Srbija’s acquisition totalled EUR652 million. Telekom Srbija did not reveal the structure and source of financing for its acquisition of United Group’s portfolio. Considering that Telekom Srbija raised USD900 million worth of Eurobonds in autumn 2024, it is assumed that some of those funds may have been employed in the subject acquisitions. Otherwise, it is possible that Tel- ekom Srbija employed a combination of cash
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