Two of the leading telecommunications companies in the Nordics, TeliaSonera and Telenor, have announced a new joint venture in Denmark as they have signed a deal to merge their operations in the Danish market into a new entity in which the both parties will own 50% each, they say.
The newly-created mobile operator is expected to have around 3.5 million of subscriptions and hold a 40 percent market share with revenues of DKK9bn (€1.2bn). Telenor and TeliaSonera have been working together in Denmark through their joint mobile network since 2012 as the telecommunications market in this region has been tough with little room left for investments and innovation, they say.
The benefits of the merger will include synergies in the key areas such as distribution, sales and marketing, call centres, network and IT. Additionally, after the merger the new company will be better positioned for investments in new services, larger distribution network and better connectivity.
The board will consist of seven members, of which three will be appointed by each party and the Chair of the Board will be chosen unanimously by both companies. The recruitment process for a new CEO is expected to start soon.
The merger will finally require the approval from the EU Commission and the transaction should be completed during 2015. By then the operations will remain separate, it says. Integration costs are expected to stand at DKK800m (€107.5m) from 2015 to 2017.
“Competition in Denmark is intense and we face continued pressure on revenue growth and profitability, making consolidation inevitable. By combining the assets and customer bases of Telenor and TeliaSonera in Denmark, the joint venture will become a robust operator. We will be able to offer our customers a high-quality network with outstanding connectivity and the best customer experience in Denmark,” says Kjell Morten Johnsen, EVP and Head of Telenor Region Europe.