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To: 49thMIMOMander who wrote (19148)	3/26/2002 2:20:10 PM
From: Eric L	Respond to of 34857

re: Telia and Sonera Merger Announced The combined company will have 8.1 million mobile customers in the Nordic and Baltic regions. The companies said they will have additional growth opportunities in the Russian and Eurasian mobile businesses. >> Nordic Operators To Merge March 26, 2002 Global Wireless Nordic telecom operators Telia and Sonera announced plans to merge through an all-stock transaction, creating a combined company with 2001 revenues of US$7.9 billion. Sonera shareholders will receive 1.5144 Telia shares in exchange for each Sonera share, offering a premium of 15.8 percent based on the closing prices of the companies' shares on 22 March. The new company will be headquartered in Stockholm, with a new name decided later. The Swedish and Finnish government have agreed to support the merger. The latest round of talks began in February, confirmed Kimmo Sasi, the Finnish Minister of Transport and Communications. What is now clear is that the first contacts were made by Telia, with approval granted by Sonera's principal shareholder, the Finnish government, which holds a 53.01-percent stake in the company. Telia is 70 percent owned by the Swedish state. The combined company will have 8.1 million mobile customers in the Nordic and Baltic regions. The companies said they will have additional growth opportunities in the Russian and Eurasian mobile businesses. Annual cost synergies from the merger will be US$263 million through 2004, with capital expenditure synergies expected to peak in 2004 at about US$87.7 million, the companies said. A new chief executive officer for the combined group will be appointed from outside the two companies. Telia's decision to merge with Finland's Sonera is being linked to U.S. telecom company SBC Communication's plan to divest its 42.01-percent equity stake in Denmark's TDC. Both groups gave serious consideration to wedlock in 1998 and in 2001, but without even the hint of nuptials, or the ringing of church bells. Following the dramatic collapse of Telia's union with Norway's Telenor in 1999, Telia's reputation as a hard task master and would-be dominant partner, greatly lessened the Swedish telecom's appeal as the perfect life-consort. Tapio Hintikka, Sonera's board chairman, has been known to oppose a "merger of unequals" where Telia would become a dominant partner in a union. "Sonera is holding out for arrangement that would place the two companies at a more even standing, in all aspects of a merger," stated Jukka Suomalainen, a telecoms analyst with Aktia Bank in Helsinki, before the merger was official. Sonera's share price has suffered considerably from the operator's heavy debt load. On the other hand, and unlike Sonera's exposure, Telia is cash rich, having avoided large-scale investments in expensive Universal Mobile Telecommunications System (UMTS) license auctions. It is conceivable that Telia will insist that Sonera divest certain loss-making segments of its global business. Likely areas could comprise Sonera's costly UMTS obligations in Germany, which has left the Finnish company with large debts. Sonera's total debt bearing amounted to US$3 billion at the end of February. << - Eric -