Tele2 seeks European acquisitions after Russia sale: Financial Times

Tele2 has told the UK’s Financial Times newspaper that it will seek further acquisitions after negotiating the sale of its Russian subsidiary to VTB, a state-controlled bank, earlier this month.

VTB (Moscow, Russia) paid $3.5 billion for the company after MTS (Moscow, Russia) and Vimpelcom (Moscow, Russia), Tele2’s biggest mobile rivals, had teamed up to offer as much as $4.25 billion.

Tele2 has told the UK’s Financial Times newspaper that it will seek further acquisitions after negotiating the sale of its Russian subsidiary to VTB, a state-controlled bank, earlier this month.

VTB (Moscow, Russia) paid $3.5 billion for the company after MTS (Moscow, Russia) and Vimpelcom (Moscow, Russia), Tele2’s biggest mobile rivals, had teamed up to offer as much as $4.25 billion.

Speaking to the Financial Times, Mike Parton, the chairman of Tele2 (Stockholm, Sweden), said the VTB bid represented the best deal for shareholders, and that Tele2 had entered into negotiations with the bank after its competitors had failed to mount an offer.

He said Tele2 had been looking to exit the country for about 18 months.

A prime reason for that appears to have been Tele2’s failure to win any 4G spectrum because it was seen to be a regional operator by authorities, rather than a fully national one.

Parton told the Financial Times that regulatory permission to run 4G services over spectrum originally intended for 2G had not been forthcoming, and that a regional asset sale looked risky.

Another option was a tie-up with state-backed Rostelecom (Moscow, Russia), but Tele2 appears to have rejected this because it would not have had a controlling stake in the new entity.

Nevertheless, he insisted that the sale to VTB had left the operator in a relatively strong financial position, and said the funds could be used to help Tele2 enter other European markets where it sees an opportunity to sell data services at low cost.

Tele2 recently won 4G spectrum during a government-run auction in the Netherlands and plans to undercut KPN (The Hague, Netherlands) and other established operators in the 4G market.