Nordic telecoms giant emerges

Swedish telecoms major Telia AB (70% Swedish government owned) is buying its Finnish counterpart Sonera Corp (53% Finnish government owned) for 1.5 Telia shares per Sonera share.

The merged company, to be headquartered in Stockholm with 34,000 staff, can build on combined 2001 revenues of Euro9bn. With 8.1m mobile customers and 7.6m fixed line customers, it will be the biggest telco in the Nordic and Baltic regions. Sonera is developing a 2.5G/3G mobile business, and the merged group will also have large stakes in the roll-out of 3G in Germany, Italy and Spain.

Telia says the aim is to "focus on the Nordic and Baltic regions and identify and divest non-core operations." Other objectives include making annual savings of Euro300m by 2005.

The nine-member board will include Sonera chairman Tapio Hintikka as chairman and Telia chairman Lars-Eric Petersson as deputy, plus three representatives from each current board.

Petersson described the deal as, "the first major step towards Nordic consolidation within the industry.

Sonera added, "We have in the past nine months carried out a significant restructuring and repositioning."

Since widespread deregulatation, Europe's telecom operators have been consolidating, By merging, incumbents such as Telia and Sonera can increase their network size and cost efficiency.

For Q1/2002, Sonera's sales increased by 2.1% to Euro536m, while Telia's sales rose 2% to SEK13.90bn.

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