By Tommy Hansen
COPENHAGEN
Two of the major players in the Nordic tele-communications business, Swedish-Finnish TeliaSonera and Norwegian Telenor, have announced they are to merge in Denmark.
After sharing the mobile network in the country since 2012, the two state-controlled companies announced on their websites that they will merge into a jointly owned company.
The new company, which has yet to be named and is owned equally by both firms, will have 3.5 million mobile costumers and a market share in Denmark of around 40 per cent, the two firms said in a statement.
Kjell-Morten Johnsen, Executive Vice President and Head of Telenor Region Europe, said on Wednesday: "The competition in Denmark is intense, and we are experiencing a constant squeeze on turnover and profit, so a consolidation was the only solution."
Together, the companies have annual revenues of more than 9 billion Danish kroner ($1.5 billion), Johnsen stated.
Envisaged synergies
The merger of the two operations seeks to achieve annual efficiency gains of more than DKK 800 million taking full effect from 2019.
Major areas of synergies are envisaged for distribution, sales and marketing, and call centers.
The two companies expect to secure approval for the deal from the European Commission in 2015.
Robert Andersson, Executive Vice President and Head of Region Europe in TeliaSonera, said: “We are making a necessary and natural move by forming a joint venture with Telenor building on the network partnership we already have with them."
"By joining forces we can secure investments in Denmark, to the benefit not only of our customers but to the Danish society as a whole.”
The majority of stock majority in TeliaSonera is held by the Swedish and Finnish governments, while the Norwegian government owns the majority in Telenor.
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