Boxing clever with 5G-fibre combination
Telia Company is to sell 100% of its operations and network assets in Denmark to Norlys for an expected €840 million (DKK 6.25 billion or SEK 9.5 billion), on a cash and debt-free basis. Norlys is a Danish energy and telecoms company.
Although the valuation is roughly nine times the size of Telia Denmark’s earnings before profitability whittlers (interest, taxes, depreciation and amortisation) for 2022, the potential profitability of the new entity makes the investment worthwhile, since it creates a new challenger with a fast, flexible backbone and an ability to network slice at minimal latency, according to Telia.
The transaction, subject to the usual approvals from Norlys’ owners and regulators, is expected to be relatively painless and to close by the start of 2024 or sooner.
Telia only wants to be the leader
Telia’s wants to focus on markets where there is a clear path to securing market leadership and defending it. After studying the form in Denmark for several years, it has concluded its best strategy is to combine Telia’s mobile position with Norlys’ strong backbone.
According to Telia Company’s President and CEO, Allison Kirkby (pictured) is its best chance of building a new national challenger with a committed long-term owner, while generating immediate value for Telia. Post-acquisition, Norlys will continue to build on the cornerstones of being an integrated telecom and energy group that services Danish households and enterprises.
“This is an exciting opportunity for our Danish business and colleagues to become part of a new national challenger with owners who are renowned for their long-term view of both energy and digital infrastructure,” said Kirkby, “the transaction crystallises value from both the outstanding work of the Telia Denmark team who have led such an impressive turnaround of the business during the last 18 months and from the leading 5G digital infrastructure that we have built up in the country.”
Better deal for customers
After closing, Telia’s Danish customers will gain access to more products and services from Norlys, promised the Telia CEO. Meanwhile, Telia will concentrate on markets where it can sustain or build a leading position.
Merging Telia’s mobile network and Norlys’s fibre business creates a full-service for Denmark, which paving the way to significant growth opportunities, said Niels Duedahl, Norlys CEO. “A strong mobile arm will expand our position as the number one challenger in the Danish market and add to our presence across both the digital and green value chains.
Once this transaction closes, I very much look forward to welcoming our new, talented employees in Denmark. I have been impressed by the significant improvements in the business over the past 18 months, and I am convinced that our new colleagues will contribute to the Norlys group with a strong customer centric and digital mindset.”