TeliaSonera acquires Tele2’s operations in Norway at an enterprise value of SEK 5.1 billion on a cash and debt free basis. The company has also committed itself to a 98 percent population coverage for 4G by 2016, two years ahead of its obligations.
The transaction will increase TeliaSonera’s mobile market share in Norway to approximately 40 percent from 23 percent while the mobile subscription base will increase to 2.7 million from 1.6 million. In order to show the benefit of consolidation for the customer, TeliaSonera is accelerating the 4G roll-out to reach 98 percent population coverage already by 2016 instead of 2018.
“I am delighted that we have reached an agreement to acquire Tele2 in Norway. This is a great strategic fit for TeliaSonera and in line with our ambition to strengthen our position in our core markets. At the same time it enables us to both faster and further invest and deliver best in class services to the benefit of Norwegian customers and society,” says Johan Dennelind, President and CEO.
The acqusition is estimated to incur integration costs of between SEK 250-450 million and investments estimated to SEK 350 million in order to handle the increased traffic. Also expected are substantial cost synergies, estimated to at least SEK 800 million annually from 2016.
“We look forward to welcoming Tele2’s staff and customers to NetCom and the TeliaSonera family. The greater scale will improve our competitiveness and ability to offer mobile internet services to enterprise customers and consumers in the entire country, including the rural areas where large investments are needed,” says August Baumann, head of TeliaSonera’s Norwegian operation NetCom.
Once the acquisition is completed Tele2’s customers will have access to a nationwide 4G network which currently covers 3.2 million people and in 2016 virtually all Norwegians. TeliaSonera will continue to offer a variety of brands on the Norwegian market, both premium and low cost brands.
The acquisition is subject to approval from the Norwegian Competition Authorities and is expected to be finalized in the first quarter of 2015 at the latest.