TeliaSonera exits NextGenTel by selling to Telio for SEK 700 million

Telecom Lead Europe: TeliaSonera has sold NextGenTel, its Norwegian subsidiary, to Telio for around SEK 700 million.

Following the acquisition, Telio will become the number 3 fixed broadband provider in the Norwegian market and the number two xDSL broadband provider.

TeliaSonera purchased NextGenTel in 2006.

TeliaSonera will continue to serve the customers in Norway through its mobile brands NetCom and Chess.

Eirik Lunde, Telio’s CEO, said: “We know NGT well since it already provides broadband services to a number of our customers. A combined Telio and NGT will have the potential to become a highly efficient, cost effective and customer-oriented telecom player. We look forward to welcoming the NGT team to the Telio Group.”

TeliaSonera exited from NextGenTel as it does not constitute the appropriate platform to compete successfully in the Norwegian broadband market. During the first nine months of 2012, the company posted NOK 693 million revenues and an EBITDA excluding non-recurring items of NOK 118 million.

The Acquisition will secure Telio in-house capabilities, ensure delivery of broadband services and expand Telio’s customer base. The combined entity will have substantial potential for cross-selling of services to the combined company’s customer portfolio. The combined entity will also have significant potential for realizing scale benefits and more cost effective operations.

Malin Frenning, president Business area Broadband Services, TeliaSonera, said: “After careful evaluation of our options for NextGenTel, we have decided to prioritize other parts of our business where we believe we can achieve higher returns.”

TeliaSonera will receive NOK 531 million in cash upon closing with the remaining consideration of NOK 70 million is to be paid in the form of Telio shares. TeliaSonera will recognize a loss of SEK 1.6 billion in the fourth quarter of 2012 from the write-down of goodwill.

This acquisition represents a step-change for Telio as it more than double its size and broaden product offering in core Norwegian market.

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