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TeliaSonera to buy Tele2 Norway
2014-07-07 08:38:00| Telecompaper Headlines
(Telecompaper) Tele2 has agreed to exit the Norwegian market and sell its activities there to TeliaSonera for SEK 5.3 billlion cash. The decision follows Tele2's failure to win additional spectrum rights in the auction in December 2013 in Norway. Tele2 said in March it was considering strategic options, including a sale or partnership, for the Norwegian activities. The sale, which puts the enterprise value of Tele2 Norway at SEK 5.1 billion, will result in a capital gain of SEK 2 billion for Tele2. TeliaSonera will benefit from an additional 1.2 million customers, enhanced network scale and a quicker roll-out of 4G. The company committed itself to 98 percent population coverage for 4G by 2016 as part of the deal, two years ahead of its obligations.The transaction is subject to regulatory approval from the Norwegian Competition Authority, which is expected by the first quarter of 2015. Tele2 Norway had net sales in 2013 of SEK 4.1 billion and EBITDA of SEK 121 million. With the takeover, TeliaSonera's mobile market share in Norway will increase to approximately 40 percent from 23 percent, and its mobile subscriber base will grow to 2.7 million from 1.6 million. The acquisition is estimated to require integration costs of SEK 250-450 million and investments of SEK 350 million in order to handle the increased traffic. The operator also expects substantial cost synergies, estimated at at least SEK 800 million annually from 2016.
Tags: buy
norway
tele2
teliasonera
Category:Telecommunications