Tele2 struck an agreement to sell its Croatian unit to European telecoms and media company United Group for €220 million, as it continues to refocus its business.

In a statement, Tele2 said the deal is subject to regulatory approval, but will not require a green light from the European Commission. It is expected to close before the end of 2019.

Tele2 said it will decide on the use of the proceeds after completion, taking into account the group’s investment needs and other financial implications. The company is currently undergoing a change in strategy and cost-cutting drive as part of an ambition to become an integrated fixed-mobile challenger in key markets.

As well as the sale in Croatia, the company last month announced plans to sell its joint venture stake in Kazakhstan.

For United Group, the deal boosts its presence in South East Europe. It currently has connectivity and media operations across six countries in the region.

“We believe Tele2 Croatia will create even greater value for our customers going forward as part of United Group’s family of telecom and media companies. For Tele2, this opportunity enables an increased focus on successfully executing our strategy in the remaining footprint,” added Anders Nilsson, president and CEO of Tele2.

GSMA Intelligence estimates Tele2 Croatia has around 913,000 connections, trailing Deutsche Telecom’s Hrvatski Telekom unit (2.6 million) and Telekom Austria (1.8 million).