The combination of Tele2 and UTA creates a leading telecom operator in Austria, servicing both residential and business customers. The new venture will become the most significant competitor to the incumbent in the Austrian telecommunications market. The acquisition of UTA will position Tele2 as the prime beneficiary of the ADSL opportunity by offering Tele2 access to more than 60% of the Austrian population at the end of 2004. The acquisition will significantly lower Tele2's costs in the Austrian market by providing it with access to the backbone and local access infrastructure of UTA. Additionally, Tele2 will leverage UTA's position in the corporate market to take advantage of further cross-selling opportunities. The new venture will continue to invest in Austria and provide its residential and corporate customers with high-quality products and services at low prices.
Tele2 has agreed to acquire UTA for MEUR 213 on a debt-free basis with consideration consisting of cash and assumed debt. As of August 31, 2004, UTA had a cash position of MEUR 11.8 and substantial accumulated tax losses carried forward. The tax losses have a face value of c. MEUR 400 with a book value of approximately MEUR 47. As of the date of this press release, UTA had over 500,000 customers, 146 unbundled ADSL PoP's and 15,447 Km's of fiber optic network. UTA recorded revenues of MEUR 115 and EBITDA of MEUR 5.5 in the six months ending June 30, 2004.
The closing of this acquisition is subject to obtaining clearance from the respective Austrian anti-trust authorities.
Lars-Johan Jarnheimer, CEO of Tele2 said; "The acquisition of UTA is consistent with our strategy. First we build a customer base and create a profitable business. Then, if it makes commercial sense and we can lower our costs, we may choose to integrate backwards in a particular country. UTA gives Tele2 both infrastructure and customers making the acquisition particularly attractive. Austria's consumers and businesses will benefit from the emergence of a bigger and stronger competitor to the incumbent, providing high quality telecom services at low prices."
CONTACTS
Lars-Johan Jarnheimer, President and CEO, Tele2 AB
Telephone: + 46 8 562 640 00
Håkan Zadler, CFO, Tele2 AB
Telephone: + 46 8 562 640 00
Dwayne Taylor, Investor enquiries
Telephone: + 44 20 7321 5038
Lena Krauss, Investor enquiries
Telephone: + 46 8 562 000 45
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