STOCKHOLM (AP)-Sweden and Norway signed an agreement to merge and partially privatize their state telecommunications companies.
The proposed merger of Sweden’s Telia and Norway’s Telenor first was announced in January, but signing the agreement was delayed, reportedly by disputes about where several of the new company’s divisions would be located.
“We have solved all the problems,” said Swedish Trade and Industry Minister Bjoern Rosengren, who signed the agreement with his Norwegian counterpart Dag Jostein Fjaervoll. He did not elaborate.
Both countries’ parliaments now must approve the agreement. The combination of Telia and Telenor would create one of the Nordic countries’ largest companies, worth about 155 billion Swedish kronor, or $18.6 billion.
The two companies employ a total of about 51,000 people and it was not clear how many jobs would be lost in the merger. Fjaervoll said he believed the move ultimately would create new jobs as the company becomes a stronger international competitor.
Telia’s chief executive officer, Jan-Aake Kark, who will be deputy CEO of the new company, said he estimates within five years more than half of the merged group’s sales will come from operations outside of Sweden and Norway.
“The two companies’ research and development is already of high class and we will strengthen that position further, especially within the mobile, satellite and Internet operations,” Kark said.
The Swedish government initially will hold 60 percent of the new company and the Norwegian government will own 40 percent. In connection with the part-privatization, the stakes will be reduced to 33 percent each, some after 2000.
The chairman of Telia, Jan Stenberg, will become chairman of the new group, while Tormod Hermansen, currently chief executive of Telenor, will become its CEO.
The group will have its main headquarters in Sweden, while the headquarters for the international operations will be located in Norway.
