Telia comments on media reports regarding transaction costs and incentive systems
- 2002-10-08 22:00 UTC
Telia wishes to make the following clarification in light of the information that has been circulating in the media about the transaction costs for the merger between Telia and Sonera and Telia's bonus systems.
The total transaction costs are estimated at SEK 1,200 million (EUR 135 million, p. 99 of the prospectus). Of this amount, an estimated SEK 472 million (EUR 52 million) is comprised of Finnish transaction tax (p. 99 of the prospectus). The remaining costs of SEK 728 million consist of costs for banks, legal services, auditors, prospectus preparation, printing, distribution, shareholder information and stock exchange fees. Concerning banks, the costs for Sonera's principal advisor, Goldman Sachs, is estimated at EUR 20 million (SEK 182 million) (p. 74 of the prospectus) and for Telia's principal advisor, Carnegie, at less than SEK 100 million. Other banks involved in the merger include Lehman Brothers (advisor to Sonera), Merrill Lynch (advisor to Telia and dealer manager in the United States) and Nordea (offer to Finnish private individuals). Costs for other banks total less than SEK 200 million, of which the greatest part concerns remuneration to Lehman Brothers. The remaining amount shall cover legal fees, auditors, printing, etc. as described above. The remaining amount also includes a reserve for the transaction tax cost, which is variable with Telia's share price, of approximately SEK 100 million.
Variable remuneration (p. 223 of the prospectus)
Telia has for many years had a payroll system that includes both fixed and variable remuneration. The variable components are performance-based. There are both individual plans and a Group-wide plan. The goals for the year in the individual plans include financial goals as well as, to a lesser extent, individual performance goals. The goals for the year in the Group-wide plan include planning and realization of the integration of Telia and Sonera and the performance levels of Telia´s businesses. The Group-wide plan affects approximately 70 managers and key personnel within Telia. The maximum payment in accordance with the Group-wide plan totals SEK 30 million, which is the same amount as for the Group-wide plan for 2001. Telia's president and CEO determines the payment based on the Group-wide plan. The development of Telia's business operations is an important factor in this decision. A decision about any remuneration concerning the president and CEO, who is also affected by the Group-wide plan, is made by the compensation committee within the Board of Directors.
For further information journalists can contact:
Telia´s Press Office, phone +46 8 713 58 30
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