TeliaSonera will combine fixed line operator Teo and mobile operator Omnitel, its two subsidiaries in Lithuania, to generate annual synergies of around EUR 10 million.
The new decision will strengthen TeliaSonera’s core business in the Nordics and Baltics. The acquisition is expected to be finalized in first quarter of 2016.
Earlier, TeliaSonera decided to exit from the Euroasia region.
“Consumers no longer make a distinction between fixed and mobile services and the demand for converged offerings is increasing. The combination of Teo and Omnitel will create a converged telecom operator and strengthen the market position through clear synergies,” said Robert Andersson, chair of Teo.
Teo will acquire Omnitel for EUR 220 million on a cash and debt free basis. The merger is estimated to generate annual synergies of around EUR 10 million when implemented.
Based on Omnitel’s 2014 results, the purchase price corresponds to an EV/EBITDA multiple of 7.8x or approximately 5.7x taking the estimated synergies into consideration.
Teo will use external financing for the acquisition and TeliaSonera’s ownership in Teo will remain at 88.15 percent following the transaction.
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