Telenor takes on Telia in Nordics with DNA deal

By BLOOMBERG

STOCKHOLM • Norwegian mobile operator Telenor ASA is buying a majority stake in Finnish phone company DNA Oyj for €1.5 billion (RM6.93 billion), challenging rival Telia Co AB for dominance in the Nordic region.

Telenor will pay €20.90 a share in cash for the 54% of DNA held by Finda Telecoms Oy and PHP Holding Oy, the company said in a statement yesterday.

It will also make a mandatory bid for the rest of the equity at the same price. DNA stock surged 7.6% to €20.94 as of 11:06am in Helsinki yesterday.

The deal will give Telenor control of the third-largest mobile operator in Finland, a country with the highest mobile data usage in the world.

DNA is also the nation’s second- largest broadband service provider and biggest cable-TV service.

Morgan Stanley analysts said the price implies a richer valuation for DNA than other recent industry deals.

Telenor and Sweden’s Telia will now be vying for customers in all the Nordic countries except Iceland — Telenor is already the second-largest operator in Denmark and holds the No 3 position in Sweden.

Telenor has turned its focus to markets closer to home after selling assets in India and central and eastern Europe. It still has interests in parts of Asia, including Myanmar, Thailand, Bangladesh and Malaysia.

The increase in Telenor’s leverage after the deal “could disappoint some investors who were hoping for special dividends/returns when Telenor increased its leverage target at the start of the year”, the Morgan Stanley analysts wrote in a note. — Bloomberg