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Swedish telecom giant Tele2 and Com Hem to merge

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Swedish telecom giant Tele2 and Com Hem to merge
The merger is expected to be voted through later in 2018. Photo: Janerik Henriksson/TT
08:50 CET+01:00
Swedish mobile operator Tele2 and broadband provider Com Hem have announced they plan to merge and create a new joint venture.

The firms said 450 million kronor in savings could be made by merging, as well as the same amount in increased revenue.

"We are delighted to have reached agreement to combine two great Nordic companies to create a leading integrated connectivity provider in the Swedish market," Tele2 Chairman Mike Parton said in a statement.

"Merging is the best possible next step for both companies as it will enable us to meet the demands of tomorrow and unleash the power for the best possible digital quality of life in Sweden," Com Hem CEO Anders Nilsson noted.

The practicalities will involve Tele2 absorbing Com Hem to create “Enlarged Tele2”, for which Com Hem’s shareholders will receive around 26.9 percent economic ownership in the new Enlarged Tele2 as well as a total of 6.6 billion kronor.

READ ALSO: EU watchdogs raid Swedish telecom groups

Com Hem’s board has unanimously recommended that its shareholders vote for the merger, which the companies argue could create expected revenue synergies of 900 million kronor within five years.

Along with Com Hem, shareholders of Tele2 will also have to approve the move at their Extraordinary General Meeting, with both due to be held later in 2018. It must also be approved by the relevant competition authorities.

Investment firm Kinnevik, the largest shareholder of both Tele2 and Com Hem, will vote in favour of the merger.

READ ALSO: Former Sweden minister departs job over party controversy

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