OF STATE, 2000. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.
A: Summary
Danish GN Great Nordic has signed an agreement to sell its 53.5 % shareholding
in Sonofon Holding A/S (www.Sonofon.dk) to Telenor AS, the incumbent Norwegian
telecommunications company (www.telenor.no). Bellsouth retains its original
46.5% of shares in the Sonofon company. The sale is subject to approval by
Danish and EU authorities. With 900,000 subscribers, Sonofon is Denmark’s
second largest mobile telephone company. Telenor’s entry on the Danish market
is part of its aggressive expansion policy in the Nordic and European telecom
markets. Denmark has a population of 5.4 million with a mobile telecom
penetration of 56%.
B: Background
Danish GN Great Nordic has signed an agreement to sell its 53.5 % shareholding
in Sonofon Holding A/S (www.Sonofon.dk) to Telenor AS, the incumbent Norwegian
telecommunications company (www.telenor.no). Bellsouth retains its original
46.5% of shares in the Sonofon company. With 900,000 subscribers, Sonofon is
Denmark’s second largest mobile telephone company. The value of the
transaction is DKK 14.7 billion (approx.$2 billion) on an enterprise value
basis. GN Great Nordic's share of Sonofon’s interest bearing debt is approx.
DKK 1.5 billion, including an inter-company loan of approx. DKK 0.6 billion.
Telenor will purchase the intercompany loan from GN Great Nordic. GN Great
Nordic will realize an accounting gain of approx. DKK 12.9 billion in 2000.
Sonofon is Denmark’s second largest telecommunications company, after the
national telephone company Tele Danmark (controlled by SBC/Ameritech). Sonofon
was also the first communications company to obtain a mobile telephone operator
license after the liberalization of the Danish telecom market. Its core
business areas are mobile telephony, wireless data, and fixed wireless systems.
The company was established in 1991, and in 1992 the first calls were made on
its nationwide 900 MHz GSM network. The company later obtained a 1,800 MHz DCS
license as well. At the end of 1999, Sonofon had a market share of about 35%,
measured by number of subscribers. Sonofon markets its services and
telecommunications equipment through an extensive sales network, which includes
1,200 retail stores, 30 of which are specialty stores owned by Sonofon. The
company also provides fixed network services to more than 40% of Denmark's
major corporations and public sector institutions. Sonofon was originally a
joint-venture between Bellsouth and GN. Bellsouth still owns 46.5% of
Sonofon’s share capital.
GN Great Nordic has sold its stake in Sonofon to increase focus on its three
ICT (Information, Communication and Technology) companies: GN Nettest, GN
ReSound and GN Netcom. The potential of the three companies is very high as
they are technological leaders in their fields. GN Great Nordic expects to meet
its previously announced financial targets, such as an estimated 25% annual
growth in earnings per share. During the past eighteen months GN Great Nordic
has invested more than DKK 5 billion in acquisitions. Proceeds from the sale of
its Sonofon stake will be used primarily to continue making acquisitions to
strengthen its three core businesses.
In a recent statement, GN Great Nordic’s management explains that the decision
to sell the controling interest in Sonofon was made on the basis of mobile
telephony market developments in Europe, where many mergers and acquisitions
have occurred and further consolidation is expected. Critical mass, an
extensive international network, and efficient product development are
increasingly important. Said a management spokesman: It is vital for Sonofon
to be owned by strong international shareholders committed to the
telecommunications industry. GN Great Nordic has agreed to sell its entire
stake in Sonofon to Telenor, which is not currently active in the Danish
wireless telecommunications market. This sale is in accordance with the
shareholders' agreement between GN Great Nordic and BellSouth, owner of the
remaining 46.5% of Sonofon. In addition, GN Great Nordic has attached great
importance to obtaining a solution which will improve Sonofon’s competitiveness
and benefit the company's employees.
Sonofon’s revenues for the year 2000 are projected at approx. DKK 3.5 billion
and earnings are expected to increase from the 1999 level of DKK 736 million.
Sonofon’s operational and investment activities will continue as planned. This
year, Sonofon will invest about DKK 600 million, primarily in the development
of data services. The company will also continue its preparations for the UMTS
(Universal Mobile Telephony System) and FWA (Fixed Wireless Access) licensing
rounds coming up in Denmark later this year.
The sale is conditioned by the approval of Danish and EU authorities. The
parties expect that the sale will be approved without problems.
C. Key Contacts
For additional information about this report or for information in related
fields, please contact FCS Copenhagen:
Per B. Seehusen
Senior Commercial Specialist
American Embassy
Dag Hammarskjolds Alle 24
DK 2100 Copenhagen
Denmark
Tel (+45) 35 55 31 44
Fax 35 42 01 75
e-mail: per.seehusen@mail.doc.gov
Commercial Service Copenhagen, Denmark is part of the worldwide network of the
U.S. & Foreign Commercial Service, with the mission of helping U.S. firms with
the export of their goods and services. To accomplish this mission, FCS
Copenhagen conducts a number of services, including the Gold Key Service, which
includes arranging meetings with potential Danish distributors, agents, or
joint venture partners. For information on the Gold Key or other USDOC
services, please contact the U.S.-based Export Assistance Center nearest you,
or contact us at (45) 35 55 31 44, fax: (45) 35 42 01 75, or email:
copenhagen.office.box@mail.doc.gov. We are also on the web at www.usatrade.gov.
|
|
Regions:
EUR;Europe;Scandinavia;European Union
