10 January 2018
| James Pearce
Tele2 has agreed a $3.3 billion deal to buy Swedish cable operator Com Hem in the latest in-market consolidation move inside Europe.
The integration will see the combination of
Sweden’s second largest mobile operator with the
cable provider, giving the combined unit an offering that
covers mobile, broadband and TV.
It will become the second largest operator in both
mobile, with a combined 3.9 million customers, and fixed (0.8m
customers), and the largest digital TV provider (1.1 million
customers), giving a stronger platform to compete with market
Tele2 claimed the deal will generate SKr900 million ($110
million) in synergies over the next five years, with Com Hem
boss Anders Nilsson to lead the combined unit as CEO.
"Merging is the best possible next step for both companies
as it will enable us to meet the demands of tomorrow and
unleash the power for the best possible digital quality of life
in Sweden," said Nilsson.
"I am proud of the progress we have made during the last few
years in improving our products and services leading to
increased customer satisfaction, expanding our footprint while
delivering on all our financial targets. The transaction will
create significant benefits to Swedish individuals, households,
businesses and to the shareholders of Tele2 and Com Hem."
The deal will mark a key consolidation for investment group
Kinnevik, which is the largest shareholder in both outfits
after buying an 18.5% stake in Com Hem from NorCell last
The acquisition is backed by the boards of all three
companies, with Kinnevik agreeing not to sell any shares in
either firm for up to six months after the completion of the
merger, with Kinnevik’s new CEO Georgi Ganev set
to become chairman of the combined company.
The deal, which is subject to shareholder approval and will
need to be rubber-stamped by regulators, will also see the
departure of Tele2’s chief executive Allison
Kirkby said: ""When I began my leadership role at Tele2 I
had three overarching objectives: to drive returns through
disciplined capital allocation; to focus the group on those
markets where we knew we could win; and to become the leading
connectivity provider in the Baltic Sea region with a strong
emphasis on the consumer.
"With today’s announcement all of these
objectives have now been achieved and I am incredibly proud of
the Tele2 team and all we have accomplished over the past four
years. I am confident that, at completion, I will hand over a
company in very good shape and with Anders Nilsson and the
current Tele2 management team leading the organization, it is
in great hands to be even more successful going forward."
The acquisition follows a number of strategic movements from
Tele2 in Kazakhstan, Austria and the Netherlands, as well as
buying TDC in Sweden. It follows significant consolidation in
some European markets over recent years, including the creation
of Wind Tre in Italy, and the merger of BT and EE in the
The market has also seen a greater push towards content,
with several companies driving quad-play offers (fixed,
broadband, wireless and TV), and the likes of AT&T bidding
to buy Time Warner for $85 billion.
mergers and acquisitions,