The acquisition will almost double Telenor’s consumer market share from about 15% to 27% as part of the group’s greater focus on its Nordic markets
Telenor Group has agreed to acquire a controlling stake in Swedish broadband provider Bahnhof in a transaction valuing the company at SEK 6.1 billion (€552.7 million) on an enterprise value basis.
The acquisition will make Telenor Sweden’s second-largest fixed broadband provider, up from third. it will leapfrog Tele2, but Telenor Svige will lag market leader Telenor in total revenue and overall customer base.
Completion obligations
On completion of the acquisition, subject to regulatory approvals, Telenor will be obliged to make a mandatory cash offer to all Bahnhof’s shareholders. The approvals process is expected to take between four and eight months.
Telenor says it is the only telecom operator with “significant” operations in all four Nordic markets, of which Sweden is the largest, and has given Telenor the most growth. This acquisition is designed to accelerate that growth. Telenor group’s focus is now very much back ‘home’ in the Nordics as its phased exit from Asia continues.
The company announced a major restructuring in May at its Capital Markets Day to reflect its strategy. CEOs in the Nordic countries will join the group management as the current Nordic Business Area layer is disbanded and the separate Asian unit scrapped.
Founded in 1994, Bahnhof serves more than 500,000 consumers and about 15,000 enterprise customers. The company’s assets include proprietary network infrastructure, access to open networks and five colocation data centres.
#2 in Sweden
Telenor is not the only Swedish operator to go through an overhaul. The soon to be overtaken Tele2 (assuming the Telenor-Bahnhof deal goes through) has undergone considerable upheaval since France’s Groupe Iliad indirectly became Tele2’s largest shareholder in October last year with 19.8% stake.
Since then there have been many changes to key positions in the company, in February with more in May. Tele2 says it will also reduce headcount by 15%.
Aims of the acquisition
The acquisition of Bahnhof will increase Telenor’s consumer subscriber market share from about 15% to around 27%. Following completion, Bahnhof will continue to operate under its own brand, maintaining its focus on privacy, security and technical expertise. Telenor intends to build on Bahnhof’s market position while combining the capabilities of both organisations.
“This is an important step for Telenor in Sweden. Bahnhof brings a strong team, a loyal customer base and complementary capabilities. Together, we will be better positioned to offer competitive and relevant services to customers across Sweden,” says Jonas Edén, CEO of Telenor Sweden.
“By joining Telenor, we gain the scale to compete more effectively across both existing and new market segments”, says Jon Karlung, CEO of Bahnhof, who together with co-founder Andreas Norman will join Telenor as part of the transaction.
