French billionaire Xavier Niel’s move to acquire a substantial stake in Swedish telecom company Tele2 for $1.26 billion through Freya Investissement, a joint investment vehicle with iliad, represents a significant development in the telecommunications industry. Niel’s acquisition of 19.8% of Tele2 demonstrates a strategic investment in the European telecom market.
The transaction involves Kinnevik, a Swedish investment giant, selling its shares in Tele2 to Freya Investissement. Kinnevik is divesting 20.7 million Class A shares and 116.9 million Class B shares at a premium price, resulting in a total sale value of $1.26 billion. The average price per share reflects a 13% premium on Tele2’s Class B share price.
The deal unfolds in three phases. Initially, Freya will acquire 31.3 million Class B shares, granting it a 4.5% economic interest and a 3.5% voting interest in Tele2. Subsequently, pending foreign direct investment clearances, Freya will acquire an additional 14.2 million Class A shares and 85.5 million Class B shares, elevating its economic interest to 18.8% and its voting interest to 28.8%.
The final phase involves Freya acquiring Kinnevik’s remaining 6.5 million Tele2 Class A shares after regulatory approvals. Upon completion, and the reclassification of Tele2 Class A shares into Class B shares, Freya’s voting interest will fall below 30%, with an economic interest of 19.8%.
Thomas Reynaud, Group CEO of iliad and director of Freya Investissement, expressed enthusiasm for the partnership, highlighting the shared values and entrepreneurial ethos between iliad and Tele2. Reynaud emphasized the importance of innovation in the telecommunications sector and commended Tele2’s achievements, expressing confidence in contributing to Tele2’s future growth.
Xavier Niel’s acquisition underscores his strategic vision to expand his telecommunications portfolio and signifies a significant development in the European telecom market. As the digital landscape evolves, Niel’s investment in Tele2 positions Freya Investissement as a key player in shaping the future of telecommunications in Europe.