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Nordic operators to merge

STOCKHOLM, Sweden—Nordic telecom operators Telia AB and Sonera Corp. announced plans to merge through an all-stock transaction, creating a combined company with 2001 revenues of $7.9 billion.

Sonera shareholders will receive 1.5144 Telia shares in exchange for each Sonera share, offering a premium of 15.8 percent based on the closing prices of the companies’ shares on March 22.

The new company will be headquartered in Stockholm, with a new name to be decided later. The Swedish and Finnish government have agreed to support the merger. The Finnish government owns 52.9 percent of Sonera; the Swedish government holds a 70-percent stake in Telia.

The combined company will have 8.1 million mobile customers in the Nordic and Baltic regions. The companies said they will have additional growth opportunities in the Russian and Eurasian mobile businesses.

Annual cost synergies from the merger will be $263 million through 2004, with capital expenditure synergies expected to peak in 2004 at about $87.7 million, the companies said.

A new chief executive officer for the combined group will be appointed from outside the two companies.

In 2001, Telia embarked on an ambitious quest to establish a major European telecom company through a strategic merger with Sonera and TDC. However, talks collapsed when the stock prices of all parties concerned showed significant dips in value.

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