Tele2 to buy Network Norway, set to net half a million customers

Tele2 AB (OMX: TEL2 B) announced it has agreed to buy the majority of shares in Network Norway from Orkla ASA (OSE: ORK) , Hafslund Venture II AS, an investment arm of Hafslund AS (OSE: HNA), and Katalysator Telekom AS. Tele2 will pay around 890 million Swedish kronor for Network Norway shares and warrants held by the three companies, valuing 100 percent of network Norway in the vicinity of 1 700 million on a cash and debt free basis.

Tele2 will make an offer to remaining shareholders on similar terms. In 2007 Network Norway released its own mobile network and established a joint venture mobile network company with Tele2. Network Norway has total mobile customer base approaching 500 000, which will raise Tele2’s customer base in Norway to over 1 million. Tele2 plans to aggressively challenge the local mobile network incumbents Telenor (OSE: TEL) and NetCom.

Network Norway reported revenues of approximately 2 billion and an EBIDA of 22 million for 2010. The acquisition is conditional on regulatory approval and acceptance of the offer from over 90 percent of total outstanding shares in Network Norway.