Telia to Divest 91 Percent of Orbiant to Flextronics
- 2001-10-28 23:00 UTC
Telia today announced it has reached an agreement to sell 91 percent of Orbiant Group to Flextronics. Orbiant comprises Neterna, Telia Service, Telia Systems, Evega, Relacom, and Wireless Network Management. The consideration to Telia is SEK 1,046.5 million. Furthermore an additional payment may be payable, the size of which is dependent on the Orbiant companies' development during the period 2002 - 2004. The amount of the additional payment, which will be determined after the end of 2004, can currently not be calculated, but can amount to at most SEK 2,300 million.
Orbiant's business incorporates a complete service portfolio for the design, installation, operation, maintenance and management of networks and other equipment for fixed and mobile data and telecommunications. Companies within the group provide advanced services for mobile access networks, IP networks for corporate customers, public networks as well as standardized installation. In 2000, the group's turnover was SEK 5,700 million, of which SEK 1,700 million were derived from sales external to Telia.
The deal underscores Telia's commitment to streamline and focus on core operations. In the future, Telia will procure installation, operation and maintenance services from subcontractors such as Orbiant; Telia has drawn up an agreement for continued cooperation with Orbiant.
Orbiant's roughly 5,400 employees will form an important part of Flextronics and will become a part of the Flextronics Network Services business area. Flextronics today employs roughly 70,000 people and after this deal, Network Services will employ more than 6,400 people worldwide, of which the largest portion is situated in the Nordic region. The business area offers a complete service package and implementation, operation, and management of equipment for fixed and mobile networks. Flextronics defines the Flextronics Network Services as a prioritized growth area.
"The sale of Orbiant is an important part of Telia's long-term and deliberate ambition to streamline operations," said Marianne Nivert, President and CEO of Telia. "Through this deal with Flextronics, we are contributing to change and renew the industry in which Orbiant will now be a player of major importance due to many years of experience and broad expertise in data and telecommunications. Orbiant will be an important supplier to Telia, while still being able to act independently in the market."
"This deal will change the face of our industry. For the first time it will be possible for customers to buy truly advanced and comprehensive services from an independent player. We envision a bright future for Orbiant," said Ronny Nilsson, President Flextronics Western Europe and Chairman Flextronics Network Services.
Flextronics main business is the supply of design and manufacturing related services. Telecommunications equipment manufacturers represent a big and important customer group. The acquisition of Orbiant enables Flextronics to provide, not only design, manufacturing and distribution of products but now also installation and maintenance of these products. Through the acquisition of Orbiant, Flextronics can offer qualified and complete solutions.
Flextronics intends to expand Orbiant's current scope of operations in Sweden by offering services to additional telecom operators and corporate customers. The combination of Orbiant's expertise with Flextronics' organizational network creates favorable conditions for international expansion.
Telia and Orbiant have reached a purchase and supply agreement that will remain in effect until the end of 2004. This guarantees Telia access to important services during the period, and assures Orbiant companies a certain level of business volume.
The transaction is subject to subsequent regulatory approval.
Orbiant is Sweden's largest provider of services focusing on the design, operation, maintenance, and management of telecommunications equipment and networks. The Group possesses extensive expertise both in fixed and mobile networks. Orbiant, which is a part of Telia, has approximately 5,400 employees in over 300 locations throughout Sweden. Orbiant comprises Neterna, Telia Service, Telia Systems, Evega, Relacom, and Wireless Network Management.
Neterna designs, constructs, deploys, maintains, and operates large and public networks. The company has approximately 2,500 employees.
Telia Service handles the installation and maintenance of local access equipment for small corporate customers and households. The company has approximately 1,000 employees.
Telia Systems handles project management, integration, and implementation of business systems. The company has approximately 300 employees.
Evega handles installation and maintenance of networks and equipment for businesses. The company has approximately 600 employees.
Relacom handles the operation and maintenance of complex and simple business systems. The company has approximately 750 employees.
Wireless Network Management, formerly part of Telia Mobile AB, provides services to mobile access networks, GSM and UMTS. The company has approximately 250 employees.
Registered in Singapore, and headquartered in USA, Flextronics is a leading provider of manufacturing services to OEM companies (Original Equipment Manufacturers). Flextronics is listed on the NASDAQ in New York. Flextronics has design, engineering, manufacturing, and logistics operations in 25 countries and four continents. Flextronics Network Services is a global business area within Flextronics offering design, installation, operations, and management of fixed and mobile public telecommunications networks. Headquartered in Stockholm, the company has approximately 1, 050 employees worldwide.
Telia is the leading Nordic communications company. Telia's idea is to develop and operate the most advanced technology in a distinctive human perspective. Telia wants to create a new world where people can free their opportunities in private and business life. In 2000, Telia's sales totaled SEK 54,064 million. The 30th of June 2001 the number of employees was 22,500. Telia is quoted on the A-list of the Stockholm Stock Exchange.
Ingmar Jonsson, Head of the Orbiant Project, Telia Equity via Telia's Press Office, phone +46 8 713 58 30
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