Telenor to buy 54% stake in the Finnish telco DNA for €1.5 billion
09 April 2019
Telenor Group has agreed to acquire 54 per cent of the shares in Finnish telecom operator DNA Plc for €20.90 per share in cash, for a total consideration of €1.5 billion (approx. NOK 14.4 billion).
With the transaction, Telenor will get a strong position across fixed and mobile telecom business in an attractive and growing telecom market, helping it to further strengthen its position in the Nordic region.
Telenor has entered into separate agreements with DNA's two largest shareholders, Finda Telecoms Oy and PHP Holding Oy, which hold 28.3 per cent and 25.8 per cent, respectively, of the shares in the company.
The transaction is subject to certain conditions, including the approval by the general meetings of the seller entities and required regulatory approvals. The boards of directors of the sellers will recommend the agreements to the shareholders and convene general meetings to be held on 6 May 2019. Certain shareholders in Finda and PHP have through irrevocable undertakings agreed to vote in favour of the transactions in the Finda and PHP general meetings. Telenor expects the transaction to be completed during the third quarter of 2019.
Completion of the transaction will trigger a mandatory public tender offer for the remaining outstanding shares in DNA by Telenor. The cash consideration per share to be offered in the mandatory tender offer will be EUR 20.90. Subject to the outcome of the mandatory tender offer, Telenor intends to keep DNA's listing on the Nasdaq Helsinki stock exchange.
DNA, based in Helsinki, is an integrated fixed and mobile telecom operator with a solid market position in the fastest growing mobile market in Europe. The company is the third largest mobile operator in Finland, with 2.9 million subscribers and 28 per cent market share. DNA's customers are enjoying the fastest mobile network in Finland, and the company has over the past three years increased its mobile service revenues by 9.3 per cent per year. In addition, DNA is the second largest fixed broadband provider and the largest cable TV provider in Finland. In 2018, DNA reported revenues of EUR 912 million, EBITDA of EUR 285 million, and operating cash flow of EUR 147 million. DNA has been ranked as the most attractive employer in Finland, and the DNA brand is among the top ranked brands in Finland.
Telenor sees solid potential for DNA to continue to grow and develop, from continuing to offer more advanced products and upselling existing customers, strengthening its position in the business segment, and leveraging on Telenor's global scale and strong position in the Nordic region. The transaction is expected to generate material synergies within procurement, roaming, and best practice sharing
"DNA is an exciting addition to Telenor Group, and a natural complement to our existing operations in the Nordic region. Not only are we strengthening our footprint in the Nordic region, we are also gaining a solid position across fixed and mobile in the Finnish market and making room for further value creation. I would like to congratulate DNA's management and all employees for the impressive journey taking the business to what it is today. 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. I am looking forward to welcoming all DNA employees to the Telenor family and to an exciting future ahead of us,'' said Telenor Group Chief Executive Sigve Brekke.
The transaction will, upon completion, increase Telenor's net debt/EBITDA by 0.4x to 1.3x (assuming 54 per cent ownership share). The transaction will be funded using existing cash resources and credit facilities, Telenor added.