Tele2 to acquire mobile offering Network Norway
In a move that will increase its mobile operations in Norway, Tele2 is to acquire mobile company Network Norway to gain scale in a highly competitive market.
Initially, Tele2 will acquire over 66% of shares in the company, in a deal valued at $139 billion in cash, and then launch an offer to take full ownership. Tele2 states Network Norway had total revenues worth just over $315 million in 2010, and the full takeover of the company will value the company at approximately $235 million.
“The acquisition of Network Norway will make Tele2 the clear number three mobile operator in the Norwegian telecom market with more than 1 million customers,” said Thomas Ekman, market area director Nordic at Tele2. “This deal gives us the operational leverage that we need to complete Norway’s third mobile network.”
Operating mainly in the Nordics and Russia, Reuters reports Tele2 has recently been struggling to compete in Norway where regulators have been slashing prices - with sales down by 8% in Q2 2011.
Network Norway had 485,000 subscribers at the end of 2010 and is partnered with Tele2-owned Mobile Norway, which has invested significantly in Norwegian infrastructure.
Tele2 will hope this acquisition will able the company to compete with Telenor, the region’s largest mobile company, and mobile offering Netcom, owned by Swedish-based TeliaSonera.