Telia has won conditional EU antitrust approval on Tuesday for its $957 million bid for Bonnier Broadcasting.
The Swedish telecoms firm hopes the deal will help it better compete with video streaming companies such as Netflix and Amazon.
The European Commission said Telia had offered a series of concessions to address its concerns, including media plurality in Sweden and Finland, Reuters reported.
Christian Luiga, acting president and CEO of Telia Company, said: “We’ve had the most satisfied TV customers for five consecutive years in Sweden. This transaction enables us to improve even further.”
The integration of Bonnier Broadcasting, with its roughly 1,200 employees in Sweden, Finland and Denmark, into Telia Company will begin when the transaction is expected to close on December 2, 2019. TV4, C More and MTV will be part of Telia Company’s newly established business area for media.
Casten Almqvist, who is currently CEO of Bonnier Broadcasting, will become responsible for the new business area which will also include Telia Company’s current media operations.
Telia pledged to offer rivals fair, reasonable and non-discriminatory access to its free-to-air and basic pay TV channels, as well as to premium pay TV sports channels in Sweden and Finland, the EU competition enforcer said.
The company agreed not to discriminate against rival telecom providers and TV distributors in the sale of TV advertising space on the merged entity’s channels.
Users will get access to the merged company’s streaming services over the internet, namely its AVOD and SVOD services. The pledges are valid for 10 years.
Citi analysts said Bonnier’s traditional linear viewing model – where programs are viewed at set times – was under pressure from the rise of video-on-demand services.
“Telia is in need to return the business to underlying growth. Given the investments required, dividend risk remains to the downside in our view,” they said in a research note.
Telia, which expects the transaction to close on Dec. 2, said it still expected synergies from the deal from 2020, with a full run-rate of 600 million Swedish crowns ($61.8 million) in 2022.
It expects integration costs of 400 million crowns in 2020-2021, and an impact on operational free cash flow in 2020 of around 500 million.
The deal is politically sensitive since the Swedish government – owner of 38.35 percent of Telia’s shares – already controls Sweden’s public service television network SVT.
Bonnier’s brands include Sweden’s biggest commercial broadcaster TV4, streaming service C More and Finland’s MTV.