TeliaSonera executes on new strategy – Teo and Omnitel join forces

6 October 2015

TeliaSonera executes on its new strategic focus by combining its two Lithuanian subsidiaries. The fixed line operator Teo and the mobile operator Omnitel have decided to join forces, which strengthens TeliaSonera’s core business in the Nordics and Baltics.

“Consumers no longer make a distinction between fixed and mobile services and the demand for converged offerings are steadily increasing. The combination of Teo and Omnitel will create a leading, fully converged telecom operator and strengthen the market position through clear synergies and enhanced customer proposition,” says Robert Andersson, Chair of the Board of Teo.

Teo will acquire Omnitel for EUR 220 million on a cash and debt free basis and the combination is estimated to generate annual synergies of around EUR 10 million when implemented. Based on Omnitel’s full-year 2014 results, the purchase price corresponds to an EV/EBITDA multiple of 7.8x or approximately 5.7x taking the estimated synergies into consideration. A fairness opinion has been delivered by KPMG to the Board of Directors of Teo in connection with the transaction.

Teo will use external financing for the acquisition and TeliaSonera’s ownership in Teo will remain at 88.15 percent following the transaction. The acquisition is expected to be finalized in first quarter of 2016 at the latest.

TeliaSonera AB discloses the information provided herein pursuant to the Swedish Securities Markets Act and/or the Swedish Financial Instrument Trading Act. The information was submitted for publication at 08.00 a.m. CET on October 6, 2015.