Tele2 struck a deal to acquire Swedish fixed telephony, broadband and pay-TV provider Com Hem in a move to increase the services it supplies in its home market.
Com Hem shareholders will receive a total of SEK6.6 billion ($805 million) in cash and 26.9 per cent of the merged company. Financial Times figures put the total value of the deal at SEK27 billion.
Integration of the fixed, broadband and cable company will cost Tele2 around SEK600 million, with most fees incurred in the first three years after completion. Following the tie-up, the combined company is estimated to achieve annual savings of SEK900 million.
On completion of the deal Com Hem CEO Anders Nilsson (pictured) will take over as Tele2 Group CEO from Allison Kirkby, who held the position since 2015. Prior to his role at Com Hem, Nilsson worked at Luxembourg-headquartered Millicom as EVP for commerce and services, and previously held a number of roles in the broadcast industry.
“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,” Nilsson said.
“I am humbled by the responsibility and enormously excited by the opportunity to lead enlarged Tele2 as Group CEO. The combined company will be very well positioned for the future to meet the expectations of our shareholders, customers and employees.”
The combination will create Sweden’s second largest fixed and mobile provider, the companies said, describing the move as “a natural next step”. The transaction is subject to approvals from shareholders of the two companies and regulatory approvals. Tele2 expects the deal to close in the second half of 2018.
Investment company Kinnevik, the largest shareholder of both companies with a 30 per cent stake in Tele2 and 18.7 per cent in Com Hem, gave the proposed deal a thumbs up.