Swedish telecommunications company Telia Company has entered into a binding term sheet agreement to sell its operations and network assets in Denmark to Norlys a.m.b.a (Norlys). The transaction is expected to be valued at DKK 6.25 billion (~SEK 9.5 billion) on a cash and debt-free basis, and subject to final and binding agreements, approval from Norlys’ owners, and customary regulatory approvals, with closing expected in Q1 2024 at the latest.
Norlys is Denmark’s largest integrated energy and telecommunications group with approximately 800,000 owner-members, 1.7 million customer relations, 3,500 employees, and more than 100 years of experience. The company supplies over 1 million households in Denmark with electricity and internet and is the owner of Stofa and Netselskabet N1. Its headquarters are in Silkeborg, and it has locations in Aarhus, Aalborg, Esbjerg, and Copenhagen, among others.
Background and Strategy
Telia's decision to sell its Danish operations and network assets is in line with its strategy to focus on markets where it can secure and defend a leading market position. After considering several strategic options in Denmark over several years, Telia believes that the combination of its strong mobile position with Norlys' robust infrastructure position creates a unique opportunity to create a new national challenger with a committed long-term owner. This will allow Telia to focus even more on markets where it can sustain or build a leading position.
Transaction Details
The binding term sheet outlines the key terms on which the transaction will take place, and the valuation is equivalent to 8.9x Telia Denmark’s 2022 reported EBITDA. The transaction is subject to final and binding agreements, approval from Norlys’ owners, and customary regulatory approvals, with closing expected in Q1 2024 at the latest.
Expected Benefits
The acquisition of Telia's assets will allow Norlys to continue building on its position as an integrated telecom and energy group that exists for the benefit of Danish households and enterprises. Combining Telia’s mobile network with Norlys' fiber business will enable Norlys to provide a full-service solution in Denmark, paving the way for significant growth opportunities. The acquisition will also expand Norlys' position as the number one challenger in the Danish market and add to its presence across both the digital and green value chains.
Statements from the CEOs
Allison Kirkby, Telia Company President and CEO, expressed excitement about the announcement and how it presents an opportunity for Telia's Danish business and colleagues to become part of a new national challenger. She believes that the transaction crystallizes value from the outstanding work of the Telia Denmark team, who have led such an impressive turnaround of the business during the last 18 months, and from the leading 5G digital infrastructure that Telia has built up in the country. Kirkby stated that after closing, Telia's Danish customers will have access to a broader set of products and services from Norlys.
Niels Duedahl, Norlys CEO, expressed admiration for the significant improvements in the Telia Denmark business over the past 18 months and is convinced that the new employees in Denmark will contribute to the Norlys group with a strong customer-centric and digital mindset. He said that combining Telia's mobile network with Norlys' fiber business will enable Norlys to provide a full-service solution in Denmark, paving the way for significant growth opportunities.
