Telia bids £4.5bn for Sonera to create Nordic telecoms giant
The on-off merger talks between Sweden's Telia and Finland's Sonera finally resulted in a €7.3bn (£4.5bn) deal yesterday to create the biggest telecoms operator in the Nordic region.
The combined business, which will have 34,000 staff and some €9bn of revenues, will be the leading mobile operator in Sweden and Finland, the second-largest in Norway and the fourth-biggest in Denmark.
Tapio Hintikka, Sonera's chairman, will be chairman of the new company while Lars-Eric Petersson, Telia's chairman, will be deputy chairman. A chief executive will be appointed from outside the two companies and Harri Koponen, Sonera's chief executive, will become deputy chief executive.
Mr Hintikka said he believed the combined company would have good growth opportunities in the Baltic States, Russia and Eurasia and would be in a "very strong position" to play an active part in any future consolidation of the sector.
Under the terms of the proposed all-paper deal, Telia is offering Sonera shareholders 1.5144 Telia shares which will see Telia investors end up with 64 per cent of the new company and Sonera shareholders 36 per cent.
The plan, however, was poorly received by investors with Telia stock falling 10.8 per cent to close at 35.4 Swedish Kronor while shares in Sonera finished down 2.6 per cent at €5.68.
The new company, which will continue to trade under both brand names until a new name has been chosen, will be headquartered in Stockholm and will have some 8.1 million mobile customers and 7.6 million fixed-line customers in the Nordic region.
Under the terms of the deal, Telia said it would exit its mobile phone business in Finland, the only directly overlapping operation between itself and Sonera.
"This transaction constitutes the first major step in the Nordic consolidation within the industry. Through this we will together be able to benefit from a larger scale operation in the Nordic and Baltic regions," Mr Petersson said.
The deal, which is subject to shareholder approval, will see the combined entity have about €3.9bn of net debt. It is expected to result in total one-off costs of about €250m this year and next.
The Swedish government, which owns 70 per cent of Telia, and the Finnish government, which owns 53 per cent of Sonera, agreed to support the deal.
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