What Iliad will do in Tele2
After the rejection by Vodafone in Italy, the French telecommunications group founded by Xavier Niel continues its expansion in Europe. Iliad has acquired a 19.8% stake in Tele2, becoming the reference shareholder of the operator present in Sweden and the Baltic countries
After the possibility of integration between Iliad and Vodafone in Italy faded, the telecommunications magnate Xavier Niel, owner of the French operator, continues his expansion throughout Europe.
The Iliad group announced today the binding agreement, through Freya Investissement, a jointly owned vehicle set up by Iliad itself and NJJ Holding (the French billionaire's personal holding), with Kinnevik to acquire approximately 19.8% of the share capital including shares of both Class A and Class B in Tele2, one of the leaders in the Swedish and Baltic telecommunications markets for approximately 13 billion SEK (1.16 billion euros).
After approval by the competent authority, at the time of closing of the transaction, Freya will become the reference shareholder of Tele2.
Niel's company has expanded across Europe offering telecommunications services at low consumer prices and low costs. Iliad has entered the telecom market in Italy and Poland, and Niel is also looking to expand into Ukraine and Portugal, and has acquired a minority stake in the UK's Vodafone Group Plc, reports Bloomberg .
However, the desired consolidation in Italy by integrating the activities of Iliad and Vodafone was not successful: at the end of January the British telecommunications multinational led by Margherita Della Valle rejected Iliad's offer to combine the activities of the two groups in Italy.
THE OPERATION FOR THE SHARE OF TELE2
In particular, according to the binding agreement, Freya will acquire from Kinnevik 20,733,965 A shares and 116,879,154 B shares representing approximately 19.8% of Tele2's share capital at a weighted average price per share of 94.2 crowns Swedes. The operation received unanimous support from the boards of directors of Iliad, Freya and Kinnevik, the statement indicates.
THE TIMING
The French telecommunications company hopes that this acquisition will be completed "at the latest during the third quarter" of this year.
THE TELE2 CORPORATE COMPANY
Once finalized, Iliad will become Tele2's largest shareholder with the acquisition of Kinnevik's stake. A greater weight than the other Tele2 shareholder BlackRock, which owns less than 6% of the capital, notes La Tribune .
THE NUMBERS OF THE SWEDISH OPERATOR
In 2023 Tele2, present in the mobile and fixed Internet in Sweden, Estonia, Latvia and Lithuania, achieved a turnover of 21.1 billion crowns (1.9 billion euros), with an increase of 3.6% compared to 'last year. Its net profit amounts to 3.7 billion crowns (330 million euros), continues the French newspaper.
ILIAD'S STRATEGY
The acquisition of this strategic stake will provide iliad, through Freya, the opportunity to further drive Tele2's growth and collaborate with Tele2's management team on innovation, convergence and investment in next generation networks, it said in a statement.
“The iliad Group and the Tele2 Group have a lot in common – declared Thomas Reynaud, director of Freya and CEO of Iliad – We both believe in the power of innovation and the importance of an entrepreneurial mentality. Our economic sector in Europe is very demanding. So, we have great respect for what Tele2 shareholders, management and teams have achieved and are delighted that Kinnevik has chosen Freya as Tele2's new major shareholder.”
THE EXPANSION OF THE ILIAD GROUP IN EUROPE
This acquisition demonstrates the appetite of Xavier Niel and his Iliad group. In recent years it has increased its purchases in the Old Continent, comments La Tribune . Already present in France, Italy and Poland, the billionaire is building a pan-European telecommunications giant step by step. Last month it announced the acquisition of Ukrainian operator Lifecell for $500 million. But the coup in the Italian market with Vodafone's activities did not succeed.
NOTHING TO DO WITH VODAFONE IN ITALY
The marriage between the Italian activities of Vodafone and Iliad does not take place.
At the end of January, Iliad announced that the British multinational telecommunications company had rejected Iliad's offer to merge the activities of the two groups in Italy.
Iiad's latest proposal, following the one presented on 18 December, was to create a 50% joint venture which would attribute an enterprise value of 10.45 billion to Vodafone's activities in Italy and 4.25 billion to Iliad. Furthermore, the French operator, unlike the first proposal, would not have had any call options in its favour.
Without forgetting that already in January 2022 Iliad had offered 11.25 billion euros to buy Vodafone Italia, rejected by the British multinational . And this second attempt also failed. The French telecommunications group – which has expanded in Italy, becoming the country's fourth largest telecommunications operator in terms of subscribers – has therefore announced that it will continue its growth strategy as an independent operator at this point. For its part, Vodafone Italia confirmed the interruption of negotiations with Iliad, specifying that discussions with other parties are continuing.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/iliad-tel-2/ on Mon, 26 Feb 2024 10:36:48 +0000.