Telia agreed to sell its 76.6 per cent stake in Spanish operator Yoigo to Masmovil for €479 million, dashing the hopes of UK investment fund Zegona.

The move ends more than a decade of Telia’s operations in Spain. The company said the sale comes “as part of its strategy to increase focus on operations in the Nordics and Baltics”.

“The transaction price is based on an enterprise value for Yoigo of €625 million, of which Telia Company’s 76.6 percent share corresponds to €479 million,” it said in a statement.

Masmovil’s offer was initially thought to be in excess of €700 million. It said separately it will buy the rest of Yoigo from its minority owners.

The divestment is estimated to generate a capital gain of more than SEK4 billion ($487 million) for Telia and, following debt adjustments, reduce net debt by approximately SEK6 billion, the statement added.

Masmovil “will be able to leverage a small but great and agile team into a combined unit, creating an even stronger challenger in the Spanish market,” said Johan Dennelind, Telia’s president and CEO.

Yoigo is Spain’s smallest operator, trailing rivals Movistar (Telefonica), Orange and Vodafone, with just a 7 per cent market share (3.3 million mobile connections). Its sales in 2015 were approximately SEK8 billion.

The deal is subject to approval from the Spanish competition authorities and is expected to close during the third quarter of 2016.

Telia and Yoigo’s minority shareholders are entitled to a break-up fee of €30 million if the transaction is not completed.

Earlier this week, Zegona had said it would push ahead with talks to buy the stake for around €550 million.