Tele2 Sells Russian Subsidiary for $2.4 Billion
Published on: 27th Mar 2013
By: Ian Mansfield
Sweden's Tele2 has announced a US42.4 billion deal to sell its Russian subsidiary to VTB G roup one of the country's leading financial groups.
The deal comprises a cash transaction comprising US$2.4 billion in equity value and US$1.15 billion in net debt, equivalent to an EBITDA multiple of 4.9 based on 2012 financial results.
Mats Granryd, President and CEO of Tele2 AB, comments: "We have built a very successful Russian mobile business of almost 23 million subscribers, skilled employees and strong profitability, through selective acquisitions and organic growth under a strong brand over the last 12 years. This transaction crystalizes that success."
The Russian network is the country's fourth largest after the big-three, but lacked a 3G license which was seen as a detriment to future growth under a foreign owner.
After completion of the transaction the Board of Tele2 intends to propose to distribute around US41.9 billion of the proceeds to shareholders as redemption of shares, also expected to be completed shortly after closing of the transaction.
Mats Granryd added that "We are very excited about the transformed Tele2 and our opportunities. The alignment between growth assets and more mature assets is attractive and I am certain that we can outgrow the mobile industry for many years to come. Given the prospects for our current business, we expect to reach at least net sales of SEK 35.6 billion by 2015 through organic growth. Additionally we have a strong balance sheet, which will give us both strategic flexibility and the possibility to maintain our attractive shareholder remuneration policy."
Tele2 said that it will carry on investing in its core markets: Sweden, the
Netherlands, Norway and Kazakhstan."
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