Telenor Group is set to acquire 54 percent stake in the Finland-based telecom operator DNA for EUR 1.5 billion or $1.689 billion.
The cash transaction at EUR 20.90 per share enables Telenor to get a strong position across fixed and mobile in a growing telecom market.
Norway-based telecom operator Telenor has 173 million customers in eight countries across Europe and Asia as compared with 168 million in 2017. Telenor completed the exit from the Indian mobile market last year by selling its stake to Bharti Airtel.
Telenor Group has posted NOK 110.396 billion revenue in 2018 vs NOK 112.069 billion in 2017. Telenor Group Capex excluding licences and spectrum was NOK 6.1 billion in the quarter and NOK 16.8 billion in 2018, resulting in a Capex to sales ratio of 22 percent and 15 percent, respectively.
Telenor expects the transaction to be completed during the third quarter of 2019. Telenor will also make a mandatory public tender offer for the remaining outstanding shares in DNA for EUR 20.90.
DNA, based in Helsinki, is the third largest mobile operator in Finland, with 2.9 million subscribers and 28 percent market share. DNA has increased its mobile service revenues by 9.3 percent per year over the past three years.
DNA is also the second largest fixed broadband provider and the largest cable TV provider in Finland. DNA reported revenues of EUR 912 million, EBITDA of EUR 285 million, and operating cash flow of EUR 147 million in 2018.
“We will continue to invest in DNA and will support the team in their focus on delivering high-quality services to the customers in Finland,” said Telenor Group CEO Sigve Brekke in a statement on Tuesday.
The transaction will increase Telenor’s net debt/EBITDA by 0.4x to 1.3x — assuming 54 percent ownership share — and will be funded using existing cash resources and credit facilities.