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Tele2 Norway sold to TeliaSonera for SEK 5.1 billion

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Sharath Kumar
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STOCKHOLM, SWEDEN: Tele2 AB, (Tele2), has agreed to sell its Norwegian business ‘Tele2 Norway' to TeliaSonera for an Enterprise Value of SEK 5.1 billion, equivalent to a cash value of SEK 5.3 billion. The transaction follows Tele2's strategic review of its Norwegian business prompted by changes to the structure of the Norwegian market as a result of the license auction in December 2013.

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The divestment delivers an attractive value for Tele2 and will generate a capital gain of approximately SEK 2 billion upon expected closing. The capital gain, and the value created in this transaction, is confirmation of Tele2´s continued focus on creating value for its shareholders.

Mats Granryd, President and CEO of Tele2 AB, comments: "Since we formed Tele2 Norway in 1995 we have built a successful mobile business of 1.2 million customers. We are proud to have strong brand names, an effective organization, and talented employees. However, the competitive constraints we faced without resources on the multiband frequency required us to evaluate different options for our Norwegian businesses. Whilst we have not been able to complete our originally desired strategy, the proposed deal is good for our customers, shareholders and for Tele2 as a whole. This is an attractive transaction at a good valuation and it enhances our opportunities to challenge and take new steps on other markets."

Arild Hustad, CEO of Tele2 Norway, comments: "The transaction will bring together two great players in the Norwegian market. The combined strength will create a company that is better able to serve Norwegian mobile customers and businesses. One immediate benefit of the combination is a more rapid nationwide rollout of 4G, to enable further value creation and growth in the Norwegian market."

The transaction is subject to regulatory approval from the Norwegian Competition Authority which is anticipated at the latest first quarter of 2015. Tele2 and TeliaSonera are confident that all relevant regulatory approvals will be obtained. At this stage it is too early for the company to provide information on its intended use of the cash generated. However, Tele2 will update the market in due course and remain committed to maintain its mid term objective of delivering a return of capital employed of around 20 percent and a progressive dividend policy. As of the Q2 2014 interim report, the Norwegian operations will be excluded from the financial guidance.

Tele2 Norway had net sales in 2013 of SEK 4.1 billion and an EBITDA of SEK 121 million. The customer base amounted to 1.2 million and the operations had 432 employees at the end of 2013.