Telenor buys majority stake in DNA for $1.7bn

June 2019 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

June 2019 Issue

In a $1.7bn deal which facilitates its entry into the fastest growing mobile market in Europe, Norwegian telecommunications company Telenor Group has acquired a 54 percent majority stake in Finnish telecom operator DNA Plc.

The transaction gives Telenor a strong position across fixed and mobile in an attractive and growing telecom market and further strengthens its position in the Nordic region.

Moreover, completion of the transaction will trigger a mandatory public tender offer for the remaining outstanding shares in DNA by Telenor. The cash consideration per share to be offered in the mandatory tender offer will be €20.90. Subject to the outcome of the mandatory tender offer, Telenor’s intention is to keep DNA’s listing on the Nasdaq Helsinki stock exchange.

Telenor has also entered into separate agreements with DNA’s two largest shareholders – Finda Telecoms Oy and PHP Holding Oy – which hold 28.3 percent and 25.8 percent of the shares in the company, respectively. The boards of directors of the sellers have recommended the agreements to the shareholders.

Based in Helsinki, DNA is an integrated fixed and mobile telecom operator with a solid market position in Europe. The company is the third-largest mobile operator in Finland, with 2.9 million subscribers and 28 percent market share. Over the past three years it increased its mobile service revenues by 9.3 percent per year. In addition, DNA is the second largest fixed broadband provider and the largest cable TV provider in Finland. The company has said that it will continue its business normally and the acquisition will not affect services.

Telenor sees the acquisition of DNA as another step in the execution of its strategic agenda, focusing on modernisation and value creation within core telecom in the Nordics and Asia, while continuing to deliver on the company’s priorities and shareholder remuneration policy.

In addition, Telenor considers DNA to have solid potential to continue to grow and develop, offering more advanced products and upselling existing customers, strengthening its position in the business segment and leveraging on Telenor’s global scale and strong position in the Nordic region. The transaction is also expected to generate material synergies within procurement, roaming and best practice sharing.

“DNA is an exciting addition to Telenor Group, and a natural complement to our existing operations in the Nordic region,” said Sigve Brekke, group chief executive of Telenor. “Not only are we strengthening our footprint in the Nordic region, we are also gaining a solid position across fixed and mobile in the Finnish market and making room for further value creation. I would like to congratulate DNA’s management and all employees for the impressive journey taking the business to what it is today.”

The transaction is subject to certain conditions, including approval by the general meetings of the seller entities and required regulatory approvals.

The transaction is expected to be completed during the third quarter of 2019.

Mr Brekke concluded: “We will continue to invest in DNA and will support the team in their focus on delivering high-quality services to the customers in Finland. I am looking forward to welcoming all DNA employees to the Telenor family and to an exciting future ahead of us.’’

Fraser Tennant