Telenor Buys Controlling Stake in Swedish Broadband Provider Bahnhof for $629M
Acquisition Details and Market Impact
Deal Overview
COPENHAGEN, July 8 (Reuters) - Norwegian telecom operator Telenor said on Wednesday it has agreed to buy a controlling stake in Swedish broadband provider Bahnhof in a deal valuing the company at 6.1 billion Swedish crowns ($629.7 million) on an enterprise value basis.
Share Acquisition Breakdown
• Telenor said in a statement it has agreed to acquire the shares of Bahnhof's founders, Jon Karlung and Andreas Norman, for 60 Swedish crowns per share.
• The founders directly and indirectly hold 50.8% of the shares and 86% of the votes, respectively.
• The company has also agreed to acquire a 6.7% stake held by Oresund Investment, the second-largest shareholder, for 62 Swedish crowns per share.
Financial Impact
• The deal is expected to increase annual earnings before interest, taxes, depreciation and amortisation (EBITDA) progressively during the first four years of ownership, averaging around 0.7 billion Swedish crowns per year in the period, before annual integration costs of around 0.1 billion Swedish crowns over the same period.
Market Position and Regulatory Considerations
• The acquisition will make Telenor Sweden's second-largest fixed broadband provider, it added.
• Completion of the deal, which is still subject to regulatory approvals, will trigger an obligation for Telenor to make a mandatory cash offer to all shareholders of Bahnhof.
Consumer Market Share and Brand Continuity
• The acquisition will increase Telenor's consumer subscriber market share to around 27% from around 15%, it added.
• Bahnhof will continue to operate under its own brand after the acquisition.
Additional Information
($1 = 9.6869 Swedish crowns)
(Reporting by Louise Rasmussen; Editing by Jacqueline Wong and Janane Venkatraman)
