European telecommunications markets got a bit of the consolidation they have been looking for this morning, as Teliasonera has agreed to buy Tele2's Norwegian business. The deal will cost the Nordic giant approximately $744M, and will give its existing Norwegian business the scale to better take on Telenor.
There is also a bit of moral support in here perhaps for Masayoshi Son and Softbank and their quest for T-Mobile. You see, if the Teliasonera/Tele2 deal goes through, Norway's magic mobile competitivity number will go from 4 to 3. Actually, in this case the #3 would rather further back than Sprint would be in terms of market share, since it is just getting started. Access Industries Holdings recently won the spectrum to make a go of it as #3 (#4 until today I guess), and would probably pick up any divestments Teliasonera/Tele2 sell off to make their deal more palatable to Norwegian regulators.
Teliasonera's subscribers would rise to 2.7M from 1.6M, with Telenor at 3.2M, and they will have the resources to further the 4G coverage in the country. They'll be spending $35-65M on integration and SEK 350M in capex, while expecting about $115M in annual synergies after a couple years of work.
Teliasonera does seem to be better positioned than most of its European PTT brethren to pursue consolidation opportunities right now, although DT can manage some as well. While this one is wireless, they also have the fiber infrastructure to take on consolidation opportunities there if they arise. Tele2, for its part, seems likely to keep selling off pieces from here -- they sold off their Russian assets not so long ago.
If you haven't already, please take our Reader Survey! Just 3 questions to help us better understand who is reading Telecom Ramblings so we can serve you better!Categories: ILECs, PTTs · Mergers and Acquisitions · Wireless