Telenor to acquire majority stake in the Finnish telecom operator DNA

Telenor has entered into separate agreements with DNA’s two largest shareholders, Finda Telecoms Oy and PHP Holding Oy, which hold 28.3% and 25.8% of the shares in the company, respectively.

The transaction is subject to certain conditions, including the approval by the general meetings of the seller entities and required regulatory approvals. The Boards of Directors of the sellers will recommend the agreements to the shareholders and convene general meetings to be held on 6 May 2019. Certain shareholders in Finda and PHP have through irrevocable undertakings agreed to vote in favour of the transactions in the Finda and PHP general meetings. Telenor expects the transaction to be completed during the third quarter of 2019.

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 EUR 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.

DNA, based in Helsinki, is an integrated fixed and mobile telecom operator with a solid market position in the fastest growing mobile market in Europe. The company is the third largest mobile operator in Finland, with 2.9 million subscribers and 28% market share. DNA’s customers are enjoying the fastest mobile network in Finland, and the company has over the past three years increased its mobile service revenues by 9.3% per year. In addition, DNA is the second largest fixed broadband provider and the largest cable TV provider in Finland. In 2018, DNA reported revenues of EUR 912 million, EBITDA of EUR 285 million, and operating cash flow of EUR 147 million. DNA has been ranked as the most attractive employer in Finland, and the DNA brand is among the top ranked brands in Finland.

Telenor sees solid potential for DNA to continue to grow and develop, from continuing to offer 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 expected to generate material synergies within procurement, roaming, and best practice sharing.

The transaction announced today is another step executing on Telenor’s 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.

“I am very pleased to announce today’s transaction and our entry into Finland, the fastest growing mobile market in Europe. DNA is an exciting addition to Telenor Group, and a natural complement to our existing operations in the Nordic region. 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. 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,’’ said Telenor Group Chief Executive Sigve Brekke.

The transaction will, upon completion, increase Telenor’s net debt/EBITDA by 0.4x to 1.3x (assuming 54% ownership share) and will be funded using existing cash resources and credit facilities.

Full recording of conference call with analysts and Group CFO Jørgen Rostrup

The presentation material is available at www.telenor.com/investors.

Telenor will host a press conference with Group CEO Sigve Brekke at 13.15 Helsinki time at Epicenter Helsinki, Finland. Address: Mikonkatu 9 (entrance in the corner of Yliopistonkatu and Mikonkatu).