Tele2 Group agreed to pay SEK2.9 billion (€311 million/$350 million) for the Swedish operations of TDC in order to create a stronger player in Sweden's B2B segment.
Denmark-based TDC said the sale of TDC Sweden marks the end of a strategic review launched in January and will enable it to focus on its activities in Denmark and Norway. The deal is subject to European Commission approval and is expected to close in the fourth quarter of this year.
Pernille Erenbjerg, CEO and president of TDC Group, said the company has achieved a higher value through the sale than it would have been able to gain by a continued ownership of TDC Sweden.
"With the sale to Tele2, we have found a good long-term owner who stands to achieve considerable synergies and will therefore be able to invest in further developing the business. At the same time, we have found a good business partner for both our Danish and Norwegian business customers as well as wholesale customers," Erenbjerg said.
Tele2 will gain a business with a strong focus on the public sector and corporate customers, enabling it to build scale in what it regards as the strategically important B2B segment.
Allison Kirkby, president and CEO of Tele2, said the acquisition of TDC Sweden is consistent with the company's strategy "to be champions of customer value" for both consumers and businesses.
"This deal is a unique opportunity for Tele2 to build scale and expand its range of services in the B2B market, it is hugely complementary to our existing Swedish business, and it allows us to meet the global trend of large B2B customers demanding a wider range of communication & network services," Kirkby said.
Samuel Skott, EVP and CEO of Tele2 Sweden, noted that Tele2 has traditionally been strong in mobile and fixed telephony while TDC Sweden is further ahead in network as a service, unified communications and hardware.
"Combining Tele2's and TDC Sweden's individually powerful operations will create an even stronger B2B communications provider on the Swedish market," Skott said.
Tele2 said it plans to sell shares worth around SEK3 billion as part of the transaction in order to maintain its financial strength.
TDC Sweden reported revenue of SEK3.38 billion in 2015 as well as free cash flow of SEK126 million. It had 810 full-time employees at the end of March 2016 and is headquartered in Stockholm.
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