Vodafone has agreed to sell its Hungary unit for EUR 1.8 billion.

The state-owned holding firm Corvinus Zrt and local rival 4iG have agreed to purchase the Hungarian business of British telecoms major Vodafone for the price of 1.8 billion euros ($1.8 billion).

The multinational company with a London listing also stated that the planned transaction will result in the creation of Hungary's second-largest fixed-line and mobile telecommunications provider.

Chief Executive Nick Read noted in the release, "This merger with 4iG will enable Vodafone Hungary... to play a significant role in the future growth and development of the industry as a much stronger scaled and fully converged operator.

The merged company will boost competitiveness and have better access to funding to further Hungary's digitalization.

The sale "also helps the creation of a national champion in information and communications technology by the Hungarian state."

According to a Vodafone representative, the money would be used to reduce debt on the company's balance sheet as it seeks to expand into new regions.

Heavyweight European company Vodafone, which has been undergoing reorganisation for some time, anticipates the transaction to close by the end of 2022.

In line with this approach, Vodafone last year split out and listed Vantage Towers on the German stock exchange.