Telecoms groups in £10bn tie-up
TELIA, the state-owned Swedish telco, has bought Finnish peer Sonera in the first European cross-border merger between two telecoms incumbents. The all-share offer will create a company valued at around £10bn, dominant in the Nordic and Baltic regions and listed in New York.
The group will be small by industry standards. Annual sales of e9bn (£5.2bn) are less than a quarter BT's. The Swedes end up with 64% of the combined group, and Stockholm will have the headquarters. But the Finns have taken the top jobs. An outsider will be appointed chief executive.
'This transaction constitutes the first major step in the Nordic consolidation within the industry,' said Telia chairman Lars-Eric Petersson. 'Through this we will together be able to benefit from a larger scale operation in the Nordic and Baltic regions.'
Telia, 70%-owned by the Swedish government, is issuing stock for Sonera, paying a premium of roughly 16%. The Finnish government holds 53% of Sonera. Both governments pledged to cut their stakes over the next five years.
The widely-flagged deal follows two years of talks. Telia tried but failed to merge with Norway's Telenor in 1999. Sonera lacks critical mass in an increasingly crowded Nordic and European telecoms market. The groups predicted annual synergies of e300m from 2005, though there would be one-off costs of e250m. They gave no indication of possible job losses among the combined 34,000 workforce.
Sonera chairman Tapio Hintikka will take the chair, with Petersson as deputy. Sonera chief Harri Koponen will be deputy chief executive. Telia counterpart Marriane Nivert has already said she is to retire this year.
