Swedish pension funds buy Telia Carrier for €900m

Staffan Göjeryd widescreen.jpg

Telia has sold its global operation Telia Carrier to Polhem Infra, an infrastructure investor owned by Swedish pension funds, for 9.45 billion Swedish kronor (€900 million).

After a move that was totally unexpected by the industry, the two companies said they will have a “strategic long-term partnership”.

Staffan Göjeryd (pictured) will stay on as CEO of Telia Carrier, said Allison Kirkby, the group CEO at Telia. The deal will need approval by the EU and the US, processes expected to take until the first half of 2021. 

Kirkby said: “I am confident that under the continued leadership of Staffan Göjeryd, head of Telia Carrier, Polhem Infra will be an excellent owner for Telia Carrier and that it will continue to go from strength to strength under their stewardship.”

Kirkby said: “The divestment of Telia Carrier highlights the value Telia has built in its digital infrastructure – and today we are able to crystallise some of that value.”

She added: “As a consequence, we can now fully concentrate on our Nordic and Baltic footprint, while we at the same time have secured future access for our customers to Telia Carrier’s world-leading solutions, through a long-term strategic partnership.”

It is the first major change to Telia since Kirkby started work as group CEO in May 2020 – though previous leaders have seen a gradual withdrawal from investments in central Asia and elsewhere.

According to a statement issued by Telia this morning, the acquisition is Polhem Infra’s first investment in digital infrastructure. However, Polhem Infra’s own statement worded it slightly differently: “Polhem Infra’s strategy is to create value by investing in companies that own and operates infrastructure assets that provides essential services to society.”

Polhem Infra is jointly owned by three Swedish pension funds – the first, third and fourth AP funds, AP1, AP3 and AP4. According to the Swedish government, the funds are required to manage the capital so as to maximise the benefit to the pension system. The first to fourth AP funds have a mandate to invest their capital so as to achieve high returns over the long term at low risk.

Mikael Lundin, CEO of Polhem Infra, said: “As an investor in Nordic infrastructure we will be a stable and long-term owner, committed to the company and its role in the transition towards sustainable and thriving societies globally. We will support the company with a thought-leading board of directors, and we will continue to invest in digital infrastructure, a core investment area for us.”

Kirkby, who previously led other Scandinavian telecoms companies such as Tele2 and TDC, said: “The majority of the proceeds from the sale will be used to strengthen our balance sheet and thereby provide a solid financial base for Telia Company and our shareholders, enabling both investments in services and networks in our core markets as well as providing a strong foundation for attractive shareholder remuneration.”

Telia said that last year Telia Carrier reported net sales equivalent to €513 million. “The transaction is expected to generate a capital gain of approximately SEK 7 billion kronor [€667 million] at closing.”

Lundin said: “Sweden has been a leader in investing in digital infrastructure since the 1990s. Telia Carrier transports a significant amount of all public internet data traffic. Telia Carrier is one of the leading companies in the world in this industry. This digital infrastructure is a national asset that Polhem Infra will own.”

He added: “With Polhem Infra, Telia Carrier gets a long-term stable owner with digital infrastructure as a core area. Polhem Infra’s long-term perspective gives stability for customers, employees and society.”