Stockholm-based telco Tele2 announced plans to sell its Russian operations to VTB Group, the investment arm of Russia’s VTB banking group, in a deal worth US$3.55bn.
The acquisition, comprising US$2.4bn in equity value and US$1.15bn in net debt,…
Stockholm-based telco Tele2 announced plans to sell its Russian operations to VTB Group, the investment arm of Russia’s VTB banking group, in a deal worth US$3.55bn.
The acquisition, comprising US$2.4bn in equity value and US$1.15bn in net debt, represents an EBITDA multiple of 4.9x based on FY 2012 results. Tele2 said it expected to complete the transaction “shortly”.
VTB Group chairman Andrey Kostin said: “We believe that Tele2 Russia is a good financial investment which will be growing faster than the market.
“The company has a solid track record of growth and profitability in Russia, and a strong regional position as the 4th Russian mobile operator with almost 23 million subscribers. VTB plans to cooperate with financial and strategic partners in order to further develop its investment.”
Last November VTB acquired a majority stake in Bulgarian operator Vivacom in a consortium with Sofia-based Corporate Commercial Bank.
Tele2, which will use proceeds from the sale to buy back SEK12.5bn (US$1.92bn) worth of its own shares, said it planned to maintain its focus on Europe and Eurasia. Its core markets are Sweden, the Netherlands, Norway and Kazakhstan.
Rumours that Tele2 could exit is Russian operations had previously also put Russian telcos MegaFon and Rostelecom in the frame for the assets.
Tele2 Russia posted around SEK13bn (US$2bn) in net sales for 2012 and SEK 4.7bn (US$728m) in EBITDA. It had a customer base of approximately of 22.7 million at the end of 2012.