Tele2 has agreed to sell its Austrian business Tele2 Austria to Hutchison Drei Austria for an enterprise value of EUR 95 million. The transaction sees Tele2 narrow its focus further to growth markets, while the deal means 3 Group will expand into the fixed market in Austria.
Tele2 entered Austria in 1999 and had net sales of SEK 1.1 billion (EUR 115 million) and an EBITDA of SEK 185 million in 2016. The customer base amounted to 209,000 at the end of June, down from 225,000 a year previously; most use fixed services, with only 8,000 mobile subscribers. The operations had 241 employees at the end of 2016.
Hutchison Drei Austria said the takeover will make it the biggest alternative operator in Austria, with around 4 million subscriptions and almost EUR 1 billion in revenue. In addition to developing quad-play offers for consumers, Drie plans to use Tele2's activities to target the business market more with fixed-mobile, IoT and IT services. As a result of the acquisition, the share of revenues from the enterprise segment rises to 22 percent from 12 percent.
Tele2 will receive a consideration of EUR 85 million at closing and up to EUR 10 million in the form of an earn-out to be paid over 12-24 months depending on the success of the integration process. Closing of the deal still requires regulatory approval.
