Denmark's TDC to buy Norway's Get for €1.7B

TDC has agreed to buy Norwegian pay-TV company Get for NOK13.8 billion (€1.67 billion/$2.1 billion) in a deal that the Denmark-based operator said would create Scandinavia's largest cable TV company by revenue and represented its most significant investment in some years.

In a statement, TDC said it will buy the company from GS Capital Partners and Quadrangle Capital Partners, and expects the transaction to close in the fourth quarter of 2014. It added that the planned acquisition is subject only to competition approval from the Norwegian competition authorities.

"It marks an evolution of TDC group into a leading Scandinavian provider of TV, home entertainment and high-speed broadband on the cable platform. It is also a strategic move into the consumer market in Norway within an industry we know very well from having run our YouSee cable business in Denmark successfully for years," said Carsten Dilling, TDC president and CEO.

Through the acquisition of Get, TDC said its Nordic cable business will increase to a total of 1.7 million connected households. TDC also owns a fibre-based transmission network in Norway that focuses on large business customers, and plans to combine its networks to form "a complete Norwegian infrastructure" based on fibre and coaxial cables.

"TDC Group and Get fit very well together. Get and YouSee can commercially benefit from sharing best practices and collaborate within product development, innovation and content," said Dilling. "On the business to business market, we will over time be able to offer the same broad product portfolio as TDC group in Denmark," he added.

Analysts from Jefferies also highlighted the wider implications that such a deal could have for the Danish operator: "This acquisition represents a very substantial cash outlay for TDC, to the extent that it amounts to a fundamental change of TDC's equity story, in our view," the analysts said.

The analysts added that while TDC has been positioned as a "telco run as a utility" since its IPO--safeguarding its dominant position in the Danish market through high investments and returning 90 per cent of remaining cash to shareholders--"the high leverage post acquisition now triggers the announcement of a reduced dividend payout policy."

Investors might also question what is next for TDC in Norway. For example, Jefferies analysts said the company might consider reselling mobile services in order to be able to offer integrated fixed and mobile plans to consumers.

That certainly raises an interesting potential development for Norway, which currently faces the prospect of returning to a duopoly should TeliaSonera win approval to buy Tele2 Norway, leaving Telenor as the only other competitor. The plans of Access Industries' Telco Data, which secured spectrum during the December auction, are not yet clear.

In August, the Norwegian Post and Telecommunications Authority (NPT) postponed its planned auction of spectrum in the 1800 MHz band for an indefinite period due to the uncertainties caused by TeliaSonera's plan to buy Tele2 Norway.

For more:
- see this TDC press release

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