TeliaSonera on Tuesday announced its decision to merge its Lithuanian fixed and mobile businesses to create a single, integrated services provider.
The move will see fixed-line provider Teo acquire mobile operator Omnitel for €220 million. The deal is expected to close in the first quarter of 2016, and generate annual synergies of €10 million.
"Consumers no longer make a distinction between fixed and mobile services and the demand for converged offerings is steadily increasing. The combination of Teo and Omnitel will create a leading, fully converged telecom operator and strengthen the market position through clear synergies and enhanced customer proposition," said Teo chairman Robert Andersson, in a statement.
At the end of the second quarter, Teo had 512,000 telephony, 378,000 broadband, and 195,000 TV subscribers. Meanwhile, Omnitel had 1.3 million mobile customers.
The company will be led by Teo chief executive Kestutis Šliuas. Both he and his opposite number at Omni tel, Dan Strömberg, will continue in their current roles until the end of 2015.
Teo will use external financing for the transaction. After the deal closes, TeliaSonera’s ownership in the new Teo will remain at 88.15%.
