“Consumers no longer make a distinction between fixed and mobile services and the demand for converged offerings are steadily increasing. The combination of Teo and Omnitel will create a leading, fully converged telecom operator and strengthen the market position through clear synergies and enhanced customer proposition,” says Robert Andersson, chairman of the board at Teo.
The new business will be run by a single management team that will be led by Kęstutis Šliužas, current CEO of Teo. Both Šliužas and Dan Stromberg, CEO of Omnitel, will continue their current roles until the end of 2015.
Teo will acquire Omnitel for EUR 220 million on a cash and debt free basis and the combination is estimated to generate annual synergies of around EUR 10 million when implemented. Based on Omnitel’s full-year 2014 results, the purchase price corresponds to an EV/EBITDA multiple of 7.8x or approximately 5.7x taking the estimated synergies into consideration. A fairness opinion has been delivered by KPMG to the Board of Teo in connection with the transaction.
Teo will use the external financing for acquisition of shares. And TeliaSonera’s ownership in Teo will remain at 88.15 percent following the transaction. Minority shareholders of Teo will remain with ownership of the same number of shares. Therefore they will own 11.85 percent of Teo and, indirectly, Omnitel.