Sweden's Tele2 exits Russian mobile market
STOCKHOLM (Reuters) - Nordic telecom company Tele2 (TEL2b.ST) said on Wednesday it would sell its Russian operations to Russian bank VTB Group (VTBR.MM) in a $3.5 billion deal and would return much of the money to its shareholders.
"Tele2 AB has agreed to sell Tele2 Russia to VTB Group in a cash transaction comprising $2.4 billion in equity value and $1.15 billion in net debt," Tele2 said in a statement.
There has been speculation about a sale for some time as Tele2 does not have a 3G or 4G license in Russia and analysts have said that without the ability to offer data services, its growth prospects were limited.
Tele2 was Russia's fourth-biggest mobile operator with around 23 million subscribers, behind MTS (MBT.N), MegaFon and Vimpelcom VIP.N.
The Swedish company said it would focus on growth in its existing core markets - Sweden, the Netherlands, Norway and Kazakhstan. It will use much of the proceeds from the sale to buy back shares worth around 12.5 billion Swedish crowns ($1.92 billion).
Tele2 also issued new growth targets, saying it expected compound annual revenue growth of 5-7 percent up to 2015 and compound annual growth in earnings before interest, tax, depreciation and amortization of 10-12 percent over the same period.
(Reporting by Simon Johnson. Additional reporting by Megan Davies in Moscow. Editing by Jane Merriman)
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