Norwegian telco Telenor has completed its reach across the Nordics, taking the first steps to acquire Finnish operator DNA.
Telenor has now officially entered into agreements with DNA’s two largest shareholders Finda Telecoms and PHP, who hold stakes of 28.3% and 25.8% respectively. Following approval at the Finda Telecoms and PHP AGMs, and regulatory approval, a mandatory public tender offer will be triggered for the remaining outstanding shares in DNA by Telenor. The current 54% will cost Telenor €1.5 billion.
The transaction is expected to be completed in Q3 2019, with the remaining shares being purchased for the same amount, valuing the entire DNA business at roughly €2.8 billion.
“I am very pleased to announce today’s transaction and our entry into Finland, the fastest growing mobile market in Europe,” said Telenor Group CEO Sigve Brekke.
“DNA is an exciting addition to Telenor Group, and a natural complement to our existing operations in the Nordic region. Not only are we strengthening our footprint in the Nordic region, we are also gaining a solid position across fixed and mobile in the Finnish market and making room for further value creation.”
DNA has been crafting itself a useful position in the Finnish market, with both fixed and mobile offerings. Having been founded in 2000, and restructured through various mergers in 2007, DNA has grown to become Finland’s third largest telco with a mobile market share of 28%. With Finland proving to be one of the fastest growing markets in Europe, this could be a useful acquisition from Telenor.
Having grown its mobile service revenues by at least 9.3% year-on-year for the last three years, Telenor expects to use its own expertise to grow revenues further through a larger product portfolio, though the enterprise market is also a target. On the business side of things, Telenor’s international footprint will certainly help, with operations across the Nordics.
The transaction will also offer Telenor more ammunition as it battles its Nordic competitor Telia,
Although Telenor still does have assets across various Asian markets, Pakistan and Thailand for example, it has been narrowing its focus on the Nordic markets recently. Exiting from India, although this was partly forced due to the success of Reliance Jio, while offloading its Eastern European business units will give the team more resources to dominate the Nordic region, though it will have to deal with Telia.
Should the transaction be approved by all the relevant parties, Telenor will have a presence in all the Nordic markets, pinning it head to head with long-time rival Telia. Aside from the Swedish market where Telia dominates, the pair are largely on level pegging, though the DNA business will add momentum.
Alongside considerable growth over the last three years, Finnish consumers have the biggest data appetites across the bloc. According to data from the OECD, the average Finnish mobile data subscription is a massive 15 GB per month which dwarfs the likes of the UK and France, where the average contract is 2.6 and 3.6 GB per month.