Tele2 and Com Hem agreed to a merger that will create the second largest mobile telephony and fixed broadband provider in Sweden and the market leader in digital TV, behind Telia. Com Hem’s shareholders will receive as merger consideration SEK 37.02 in cash plus 1.0374x new B shares in Tele2 for each share in Com Hem. This values the deal at about US$3.3 billion.
Com Hem operates a fiber-coax network serving approximately 1.5 million residential customers across Sweden. The company was established in 1983 and has approximately 1,200 employees. Its head office is in Stockholm.
Tele2, which was established in 1993 and is based in the Kista Science City, Stockholm, Sweden, operates an extensive mobile network across Sweden and has interests in The Netherlands, Lithuania, Latvia, Estonia, Kazakhstan, Croatia, and Germany.
The combined company will have a customer base of 3.9 million mobile customers, 0.8 million broadband customers and 1.1 million digital TV customers in Sweden. Its 4G network will cover the entire country while its broadband network will cover almost 60 percent of Sweden’s households.
The companies cited total annual OPEX, CAPEX and revenue synergies estimated at around SEK 900 million to be achieved within five years. The preliminary combined net sales for the twelve months ended September 30, 2017 are approximately SEK 31.8 billion with an adjusted EBITDA of SEK 9.2 billion and OCF of SEK 6.1 billion, of which Sweden accounted for approximately SEK 22.8 billion of net sales, SEK 7.2 billion of adjusted EBITDA and SEK 5.2 billion of OCF.
