Com Hem and Tele2 have each announced Extraordinary General Meetings (EGMs) for their respective shareholders on 21 September regarding their merger. Shareholders at the Com Hem EGM are being asked to support an ethics probe. Separately, Tele2 has announced appointments to the merged company’s leadership team and board of directors, and a split of its enlarged Swedish operations into B2C and B2B.
Under their merger proposal, Tele2 is absorbing Com Hem, with each share in Com Hem being exchanged for 1.0374 new class B shares in Tele2 and for SEK 37.02 in cash. The merger is expected to be registered with the Swedish Companies Registration Office in Q4 2018.
Shareholders at Tele2's EGM will vote on a motion to issue somewhat over 183.44 million new class B shares in Tele2 for the non-cash consideration. The issue will increase Tele2’s share capital by over SEK 229.30 million to almost SEK 862.93 million.
Two-thirds majority needed
Shareholders at Com Hem’s EGM will vote on a motion by its board of directors to approve the merger with Tele2. The resolution is valid only if supported by holders of at least two thirds of both the votes cast and the shares represented at the EGM. Com Hem’s largest shareholder, Kinnevik, has pledged to support the resolution. Kinnevik holds approximately 19.2 percent of the shares and votes.
Shareholders at Com Hem's EGM will vote on a proposal by shareholder Martin Green that an investigation should be held into the operator’s procedures, to ensure that the current members of the board and management fulfil relevant legislative and regulatory requirements, and the demands that society’s ethical values place on people in leadership positions.
This probe should include the current attitude and practical handling performed by Com Hem's administrators and executives, says the proposal. If the investigation finds any measures are required, then they should be taken swiftly. The probe should be presented no later than during the 2019 Annual General Meeting, Green proposes.
New management
Separately from its EGM notification, Tele2 announced a number of leadership appointments for the merged group. It said Com Hem's current CFO Mikael Larsson will become CFO of the merged group. Tele2 Sweden's current CEO Samuel Skott will become executive vice president of the Sweden Consumer operation. Karin Svensson has been named Chief People and Change Officer. She is currently a self-employed personnel advisor. Tele2 Group General Counsel Stefan Backman becomes General Counsel of the merged group.
All of these positions will report directly to Anders Nilsson, incoming CEO of the Tele2 Group. Upon closure of the merger, current Tele2 Group CFO Lars Nordmark and current Tele2 Chief People and Change Officer Richard Peers, will leave the company.
B2B and B2C divisions
Tele2 said the merger will make its Swedish operations a significantly larger part of the total Tele2 Group operation, and so it will be split into two reporting units, namely Business to Consumers and Business to Business. Skott will lead the B2C operations, which will be the largest unit in the company and will include the brands Tele2, Comviq, Com Hem and Boxer. An appointment to lead the B2B operations will be announced at a later stage, along with the remaining leadership team positions. This announcement will be made before the closing of the transaction in Q4.
Tele2 also said its nomination committee has proposed the election of current Com Hem board directors Andrew Barron and Eva Lindqvist as directors of the board of the merged company. The committee also proposes the election of Lars-Ake Norling as a new director. Norling is joining Kinnevik as an Investment Director and Sector Head of TMT in September 2018, concurrent to which he will join the board of Millicom. Barron is chairman of Com Hem.
