French telco Iliad is set to pay $1.26 billion for a 19.8 percent stake in Swedish network operator Tele2.
Iliad, which is owned by investor Xavier Niel, will purchase the shares from investment company Kinnevik, which is currently Tele2’s major shareholder.
A statement released on Monday said the purchase will take place through the Iliad investment vehicle Freya Investissement, and will be worth 13 billion Krona ($1.26 billion).
“Freya will become the reference shareholder of Tele2 upon closing of the transaction,” the Iliad statement said. “With its expertise and know-how in managing telecom assets, the acquisition of this strategic stake will offer the Iliad Group, through Freya, an opportunity to further Tele2’s growth and to collaborate with Tele2’s management team on innovation, convergence, and investments in next-generation networks.”
Freya will purchase shares in three tranches, starting with an initial batch of 31,329,972 B-class shares in the company, representing 4.5 percent of its total capital. It will make two further investments subject to regulatory approval, taking its total holding to 19.9 percent.
Thomas Reynaud, director of Freya and CEO of the Iliad Group, said the companies “have a lot in common.”
He said: “We both believe in the power of innovation and the importance of an entrepreneurial mindset. Our business sector in Europe is highly demanding. So, we have a great deal of respect for what Tele2’s shareholders, management and teams have achieved, and we’re delighted that Kinnevik has chosen Freya as Tele2’s new reference shareholder.
“We look forward to contributing to the next chapter of Tele2’s growth story.”
Niel has been actively looking at telecoms investments across Europe, and in 2022 acquired a 2.5 percent stake in Vodafone Group through his investment vehicle Atlas Investissement. He is also attempting to merge Iliad’s operations in Italy with Vodafone Italia, but earlier this month saw a merger proposal that valued Vodafone Italia at €10.45 billion ($11.32bn) rebuffed.
While it is putting money into telcos, Iliad is reportedly looking for fresh investment for its colocation data center business OpCore, and may sell up to 14 percent of the company in a deal that could raise hundreds of millions of Euros.
