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    HomeNewsTelia Company to sell its international carrier

    Telia Company to sell its international carrier

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    It will be acquired by Swedish pensions investment firm Polhem Infra but the two will form a long term, strategic partnership.

    Polhem Infra will pay SEK 9.45 billion (€902.4 million) in cash, although the deal is subject to regulatory approvals from competition authorities and others in the EU and the US.

    Telia Company expects to pocket SEK 7 billion. It is Polhem first digital infrastructure investment and the deal is expected to be completed in the first half of 2021.

    At the same time, Telia Company is to enter a long-term, strategic partnership with Telia Carrier to provide network solutions for Telia’s customers.

    International asset

    The Board of Directors has also decided to propose an additional dividend of 0.65 SEK/share, bringing the total dividend for 2019 back to 2.45 SEK/share as originally proposed in January this year.

    Telia Company said in a statement that Telia Carrier “holds the top position in the global ranking of companies with Internet backbone networks. Content, services and operator customers of Telia Carrier account for 65% of global Internet routes.

    “Its network spans across Europe, North America, and Asia, connecting customers in more than 120 countries, with the Scandinavian footprint being particularly strong through the so-called Scandinavian Ring – the part of Telia Carrier’s network that connects major Baltic and Nordic cities.”

    For 2019, Telia Carrier reported net sales of SEK 5,388 million, an EBITDA excluding IFRS-16 of SEK 500 million (SEK 888 million including IFRS-16) and capital expenditures of SEK 396 million resulting in EBITDA, excluding IFRS-16, less capital expenditures, of SEK 104 million. The agreed price for Telia Carrier equals an EV/EBITDA, excluding IFRS-16, multiple for 2019 of 18.9x. The transaction is expected to generate a capital gain of approximately SEK 7 billion at closing.

    Crystallising value

    Allison Kirkby, President and CEO of Telia Company (pictured), said, ”The divestment of Telia Carrier highlights the value Telia has built in its digital infrastructure – and today we are able to crystallize some of that value. As a consequence, we can now fully concentrate on our Nordic and Baltic footprint, while we at the same time have secured future access for our customers to Telia Carrier’s world-leading solutions, through a long-term strategic partnership.                                                                                                                                    

    ”The majority of the proceeds from the sale will be used to strengthen our balance sheet and thereby provide a solid financial base for Telia Company and our shareholders, enabling both investments in services and networks in our core markets as well as providing a strong foundation for attractive shareholder remuneration.

    ”At this time, I want to thank the whole Telia Carrier team for building such a strong customer centric business over many years. This transaction is great testament to the value they have created for their customers and for Telia Company’s owners. I am confident that under the continued leadership of Staffan Göjeryd, Head of Telia Carrier, Polhem Infra will be an excellent owner for Telia Carrier and that it will continue to go from strength to strength under their stewardship.”