Finnish media group Sanoma announced that its subsidiary Sanoma Entertainment has agreed to sell its Welho business to the DNA telecommunications group.
Sanoma states that as part of the transaction, DNA will carry out a directed share issue to Sanoma,…
Finnish media group Sanoma announced that its subsidiary Sanoma Entertainment has agreed to sell its Welho business to the DNA telecommunications group.
Sanoma states that as part of the transaction, DNA will carry out a directed share issue to Sanoma, which will become DNA’s second largest owner with an ownership of 21%. Sanoma is selling the Welho business for E200m and will record a non-recurring capital gain of approximately E185m for the sale, a capital gain which the media firm states will improve its earnings per share by approximately E1.14 in 2010.
Welho is the largest cable TV operator on the Finnish market, providing TV and broadband services. The company posted 2009 net sales of E67m, with a staff of 205.
DNA is a Finnish telco, which provides voice, data and mobile communications and TV services. The firm posted 2009 net sales of E652m and has 2.6 million customers.
Sanoma president and CEO Hannu Syrjanen said: “We will gain a share in a very profitable and competitive company with great growth potential. This is a long-term strategic ownership for us as we believe that media and telecommunication businesses are converging further. Through this transaction we are able to participate in developing the industry”.
Sanoma Entertainment president Any Nissinen added: “Welho has invested significantly in developing its network and services, and is now in very good shape. Together, Welho and DNA form a strong national telecommunication player that has the muscle for further development”.
Riitta Tiuraniemi, president and CEO of DNA, concluded: “The transaction will provide DNA with a significant share of the broadband and TV business in the Helsinki metropolitan area, where we haven’t had presence so far. Welho and DNA are a natural fit, with no significant overlapping operations – and together form an extensive, complementary whole”.
Following deal closure, Sanoma’s Entertainment division will comprise Nelonen Media’s TV and radio business and Sanoma Games’ online gaming services.
The proposed deal is still subject to approval by the competition authorities and the Council State, both of which are expected during the summer.