BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh
BBCi CATEGORIES   TV   RADIO   COMMUNICATE   WHERE I LIVE   INDEX    SEARCH 

BBC NEWS
 You are in:  Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 


Commonwealth Games 2002

BBC Sport

BBC Weather

SERVICES 
Tuesday, 26 March, 2002, 15:21 GMT
Nordic tie-up creates telecoms giant
Sonera's control centre
Sonera and Telia may, together, target Turkey
A new force in European telecoms is to be created, with the announcement that Sweden's biggest telephone firm, Telia, is to take over Finnish rival Sonera.

The tie-up between the two state-controlled firms will create a company with a market capitalisation of about $17bn (12bn), putting it in the same league as Deutsche Telekom and British Telecom.

The new business, which will be 64% owned by Telia shareholders, will be based in Stockholm, with its shares traded primarily on the Stockholm stock exchange.

The company will employ 34,000 staff, although observers believe some posts may go as Sonera and Telia seek to achieve savings equivalent to 300m euros a year by 2005.

Talking Turkey

Analysts said the takeover, in an all-share 7.4bn euro deal, would provide Telia with a springboard for expansion in Turkey and the Baltic.

Sonera alone is seen as lacking the muscle to expand in a highly competitive European telecoms market.

Giants such as Vodafone are taking an increasing interest in the Nordic states.

"This transaction constitutes the first major step in the Nordic consolidation within the [telecoms] industry," said Telia chairman Lars-Eric Petersson.

"Through this we will be able to benefit from a larger scale operation in the Nordic and Baltic regions."

State backing

Tuesday's announcement, which will create a firm with about 8.1 million mobile phone customers and 7.6 million clients of fixed line services, followed continued merger speculation.

Telia has tried at least twice before to buy Sonera, with differences over company valuations sinking a deal last year.

The merger has the backing of both Swedish and Finnish governments.

The Swedish state will own 45-50% of shares in the merged firm, with Finland holding 20%, although both governments have pledged to reduce their stakes.

But the tie-up will require permission from European Commission trade watchdogs.

Telia shares fell 10.6% to 35.60 Swedish crowns on the news.

Sonera stock was down 2.0% at 5.70 euros in late trade.

See also:

25 Mar 02 | Business
Rivals plan Nordic telecoms tie-up
22 Oct 01 | Business
Sonera results beat expectations
27 Aug 01 | Business
Telecoms cheer from Finland
11 Jun 01 | Business
Sonera boss resigns
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories