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Telenor and Telia merger to create Nordic champion
01 September 1999
Pending EU approval, Telenor, the dominant provider of telecoms services in Norway, is set to merge with Telia, its Swedish counterpart. The merger, the first in Europe, would create an operator with significant mobile, Internet and media interests. Telenor's CEO Tormod Hermansen talks to Basil Ballhatchet about the main challenges that would face the merged entity.
Telenor, the Norwegian state-owned operator, expects to gain
approval from the EU for its merger with Telia, its Swedish
counterpart, in October. This would be the first time that two
telco incumbents had been merged in Europe. According to the
merger agreement, the Swedish state will hold 60% of the
capital in the company and Norway 40%. However, both telcos are
committed to a parity holding in the company, following an IPO,
which would involve the sale of 33.2% to private investors. The
new company would be listed in 2000. Tormod Hermansen, the CEO
of Telenor, would be appointed new CEO of the merged entity.
Viking Kjellstrom, a telecoms equity analyst at HSBC, talks
about the risks and benefits of the merger: "I think the real
challenge is to integrate the companies and really bring out
the synergies, which are significant. We expect merger
synergies of Nkr5 billion ($608 million). When you...
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