TeliaSonera gets majority holding in Turkish operator Turkcell

CEO Igel says deal opens up opportunities for growth in area

Anders Igel

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The Swedish/Finnish telecommunications service provider TeliaSonera announced on Friday that it has succeeded in its quest to secure a majority holding in Turkey’s largest mobile telephone operator Turkcell.
      TeliaSonera paid a whopping EUR 2.4 billion for the 27% of Turkcell shares that it got in the deal that was closed on Friday. Combined with its previous shares, TeliaSonera now has a 64% holding in the Turkish company, which is to be transformed into a TeliaSonera subsidiary.
      Turkcell is Turkey’s largest listed company, and its 23 million mobile telephone subscribers mean that its turnover exceeds that of the Finnish Sonera.
     
TeliaSonera bought its new shares from Turkcell’s second large owner, the Turkish Cukurova Group, which has experienced some economic difficulties recently.
      About a year ago TeliaSonera and Cukurova were locked in a power struggle over decision-making in Turkcell.
     
TeliaSonera CEO Anders Igel told Helsingin Sanomat on Friday that he is very pleased with the deal.
      "We have been working for this for a long time", he said.
      According to Igel, the majority holding will consolidate TeliaSonera’s position in Turkcell and on its board of directors. He added that the position would allow TeliaSonera to make certain administrative changes in the Turkish company.
     
TeliaSonera’s holding in Turkcell dates back more than ten years when Sonera’s predecessor Telecom Finland was one of the companies that helped set up the Turkish operator.
      TeliaSonera has sought to increase its holding in Turkcell because of the growing regional market.
      On the home market - Finland and Sweden - TeliaSonera’s prospects for growth are modest. Anders Igel says that there is much more room for growth in Turkey and its surroundings.
      TeliaSonera currently owns mobile operators in countries including Georgia and Kazakhstan. Turkcell, meanwhile, has been trying to get an operator’s licence in Iran.
      The deal is seen as a personal victory for the company’s Swedish CEO, who has been criticised as being overly cautious.


Previously in HS International Edition:
  Over EUR 1 billion in state-owned shares of TeliaSonera to be sold off (9.12.2005)
  Sweden greets Sonera-Telia merger with mixed feelings (28.3.2002)
  Sonera and Telia merge; other partners to be sought in near future (27.3.2002)

Links:
  TeliaSonera press release 25.3.2005

Helsingin Sanomat