TeliaSonera creates new powerful contender in Danish mobile market - Acquires Orange in Denmark
TeliaSonera creates new powerful contender in Danish mobile market -
Acquires Orange in Denmark
TeliaSonera, the leading telecommunications group in the Nordic-Baltic
region, has signed an agreement with France Telecom to acquire its
Danish subsidiary, Orange A/S, with 605,000 mobile customers in Denmark.
Combined with Telia Mobile Denmark, a new powerful alternative will be
available for Danish telecommunications customers.
· TeliaSonera will at closing pay in cash an amount corresponding
to an enterprise value of EUR 600 million less the net debt of Orange
Denmark on the closing date.
· Closing will take place after approval by the EU Commission and
the Danish National IT and Telecom Agency and other necessary approvals.
The Board of Directors of Orange S.A. has approved the execution and
consummation of the agreement. The strategic committee of the Board of
Directors of France Telecom S.A. has unanimously recommended to the
Board of Directors of France Telecom S.A. to vote in favor of the
approval of the execution and consummation of the agreement. The
chairman of the Board of Directors of France Telecom S.A., Mr. Thierry
Breton, is also the chairman of the strategic committee of the Board of
Directors of France Telecom S.A. Approval can be attained within 25-105
· The acquisition is expected to generate synergies with a total
pre-tax cash flow effect of SEK 490 million from 2006, of which SEK 20
million is capex synergies1). The major part of the cost savings of SEK
470 million is related to closing down one of the overlapping GSM
networks. The remaining part will be derived from management of only one
brand and closing down of overlapping functions and premises. Before
implementation costs synergies are estimated to have a net present value
of SEK 4,100 million.
· Implementation costs are expected to amount to approximately
SEK 540 million and relate mainly to the costs for transferring traffic
to the retained GSM network, initial marketing and subscriber migration
costs (SIM cards etc) and a maximum payment of the guaranteed UMTS
license costs of SEK 260 million. Capital expenditure related to the
integration is estimated to approximately SEK 250 million. TeliaSonera
expects significant write-downs in relation to the transaction, mainly
related to closing down one of the networks.
· Following the acquisition, TeliaSonera will have approximately
1.1 million mobile customers in Denmark, and will be the third largest
Danish mobile operator.
"By combining Telia Mobile Denmark and Orange Denmark, we are creating a
true and powerful contender to the two dominating players in the Danish
market. Combined we will have critical mass and operational scale,
sufficient to become the first choice provider of mobile services in
Denmark. This combination will benefit the Danish mobile customers,"
comments Anders Igel, President and CEO of TeliaSonera and continues,
"In particular, the increased size will improve our ability to meet the
demands of the business customer segments, but it will also enable us to
continue improving our successful consumer service offer."
TeliaSonera currently operates mobile and fixed line communications as
well as cable TV business in Denmark. With the acquisition, TeliaSonera
is executing its strategy to increase its mobile customer base in
Denmark. Anders Igel continues: "The transaction confirms TeliaSonera's
long-term commitment to the Danish market and it strengthens our Nordic
footprint in a way that will increase our overall competitiveness in pan-
The plan is to begin integrating the mobile operations of TeliaSonera in
Denmark and Orange A/S as soon as the necessary approvals for the
transaction are obtained. Until then, integration planning will be lead
by a steering group, chaired by Kenneth Karlberg, President TeliaSonera
Norway, Denmark and the Baltic countries, and comprising Jesper
Brockner, Vice President, TeliaSonera Denmark, Richard Moat, CEO, Orange
A/S, and Kjell-Ove Blom, Senior Business Advisor, TeliaSonera, as
integration project leader.
Initially, no changes will be made in the existing customer
relationships. The existing products and services of both organizations
will continue to be delivered under separate existing brands until at
least spring 2005. No significant organizational overlaps are expected
pertaining to entities with direct customer contacts, such as customer
services and the 22 Orange shops.
Integration planning will include decisions on branding, customer
migration, new service portfolio, premises, personnel, handling of the
overlapping GSM networks and UMTS licenses. Personnel overlaps are
expected mainly within management, administration, network operations
and product and services development. Confirmation of this is expected
to be made in the beginning of 2005.
Employees in Telia Stofa and Telia Networks will not be affected
directly by the integration.
Brief description of the companies
Telia Mobile Denmark 2003 Q1 2004 End of June, 2004
Net sales (SEK million) 1,552 450
EBITDA (SEK million) -91 15
Number of customers (*) 525,000 544,000 556,000
Number of employees (*) 329 326
Orange A/S 2003 Q1 2004 End of June, 2004
Net sales (SEK million) 2,365 535
EBITDA (SEK million) 402 79
Number of customers (*) 576,000 558,000 605,000
Number of employees (*) 697 725
(*) at end of period
A press conference will be held later today at 10.00 hours CET at
Radisson SAS Scandinavia Hotel, Amager Boulevard 70, Copenhagen.
Analysts, investors and international media are also invited to
participate in a conference call with Anders Igel, President and CEO of
TeliaSonera, later today.
Time: 12.00 hours - CET (Stockholm time)
11.00 hours - UK (London time)
To ensure that you are connected to the conference call, please dial in
a few minutes before the start of the conference call.
Dial-in number:+44 (0)20 7162 0191
Participants should quote: TeliaSonera
Replay number until July 15: +44 (0)20 8288 4459, access code: 830202
For further information journalists can contact:
TeliaSonera´s Press Office, +46-(0)8-713 58 30
Statements made in the press release relating to future status or
circumstances, including future performance and other trend projections
are forward-looking statements. By their nature, forward-looking
statements involve risk and uncertainty because they relate to events
and depend on circumstances that will occur in the future. There can be
no assurance that actual results will not differ materially from those
expressed or implied by these forward-looking statements due to many
factors, many of which are outside the control of TeliaSonera.
1 Exchange rate for convenience only of 1DKK = 1.2301 SEK has been used
for transaction related currency translations in this press release
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