Telia Sells Spanish Unit Yoigo to Masmovil to Refocus on Nordicsby
Deals value Yoigo at $708 million as Masmovil buys out others
European telecom operators are pulling back to home markets
Telia AB agreed to sell its majority stake in mobile carrier Yoigo to Masmovil Ibercom SA, ending more than a decade of operations in Spain as the Swedish carrier refocuses on its home market in the Nordics and the Baltics.
The transaction, which gives mobile carrier Yoigo an enterprise value of 625 million euros ($708 million), was one of several announced Tuesday as Stockholm-based Telia pulls back from far-flung regions and side businesses. Masmovil said separately it will buy the rest of Yoigo from its minority owners.
"The decision to divest the business is consistent with the strategy to increase the focus on the Nordic and Baltic operations," Jon David Gjertsen, an analyst at Pareto Securities, said of Telia.
After a period of debt-fueled expansion, telecom carriers throughout Europe are looking to rein in spending, clean up balance sheets and focus on strengthening their core operations. Telia, which was already pulling back from Eurasia, said Tuesday it would sell a debt-collection unit and bid on a Finnish fiber network. A Swedish rival, Tele2 AB, said separately it would buy a business network in Sweden from TDC A/S.
Telia, Sweden’s largest phone carrier, will receive 479 million euros for its 77 percent stake in Yoigo. In July 2015 the company restarted efforts to sell Yoigo that had ended 15 months earlier because offers weren’t high enough. Other suitors in the latest round included Eamonn O’Hare’s investment company Zegona Communications Plc as well as private-equity firms, people with knowledge of the matter said in October.
Telia’s mobile-only business in Spain has suffered as competitors increasingly bundle fixed-line services and Internet with mobile packages and strive to increase billing. The sale of Yoigo is part of Chief Executive Officer Johan Dennelind’s plan to refocus Telia on it home markets in northern Europe. In the statement, he called the sale “an important milestone.”
Beyond Spain, Telia is planning to exit Asia and ex-Soviet markets that account for almost a third of its earnings as the former Swedish monopoly tries to distance itself from bribery allegations over the purchase of licenses in Uzbekistan.
Separately, Telia offered 130 million euros to buy Finnish broadband provider Anvia as the Swedish carrier seeks to connect homes and shore up customers for its push into digital services. Telia also agreed to sell its Nordic and Baltic debt collection business Sergel Group to Marginalen for 2.07 billion kronor ($251 million).
With the Yoigo purchase, Masmovil gains scale in a recovering Spanish market. Following several years of aggressive pricing to maintain market share amid falling sales in a contracting economy, carriers in Spain including Telefonica SA, Orange SA and Vodafone Group Plc have been raising prices as the economy returns to growth.