Norwegian telecom giant Telenor has agreed to buy a controlling stake in Swedish broadband provider Bahnhof in a deal that will value the latter at 6.1 billion Swedish crowns (USD 629.7 million) on an enterprise value basis.
Telenor has also agreed to acquire the shares of Bahnhof’s founders, Jon Karlung and Andreas Norman, for 60 Swedish crowns per share. The individuals, as per the market filings, directly and indirectly hold 50.8% of the shares and 86% of the votes, respectively.
Telenor would further acquire a 6.7% stake held by Oresund Investment, Bahnhof’s second-largest shareholder, for 62 Swedish crowns per share.
“The deal is expected to increase annual earnings before interest, taxes, depreciation, and amortization (EBITDA) progressively during the first four years of ownership, averaging around 0.7 billion Swedish crowns per year in the period, before annual integration costs of around 0.1 billion Swedish crowns over the same period,” Telenor remarked.
With the Bahnhof’s acquisition, Telenor will become Sweden’s second-largest fixed broadband provider.
Completion of the deal, which is still subject to regulatory approvals, will trigger an obligation for Telenor to make a mandatory cash offer to all shareholders of Bahnhof.
“The acquisition will increase Telenor’s consumer subscriber market share to around 27% from around 15%,” the company added.
Instead of merging completely with Telenor, Bahnhof will continue to operate under its own brand.
“Sweden is the largest Nordic market by population and a key strategic priority for us. This transaction gives us the breadth and scale to compete more effectively and create long-term value for customers and shareholders,” says Benedicte Schilbred Fasmer, president and CEO of Telenor Group.
Founded in 1994, Bahnhof has built a strong and profitable fixed broadband business in Sweden, serving more than 500,000 consumer customers and approximately 15,000 enterprise customers in the Nordic country. The company’s assets include proprietary network infrastructure, access to open networks, and five colocation data centers. Combined with Telenor’s existing fixed and mobile operations in Sweden, Bahnhof will be adding complementary strengths in fixed broadband, enterprise services, and secure infrastructure.
“Over the years, we have built Bahnhof into a customer-focused company with a trusted brand and a clear position in the Swedish market. By joining Telenor, we gain the scale to compete more effectively across both existing and new market segments,” said Jon Karlung, CEO of Bahnhof, who together with co-founder Andreas Norman will join Telenor as part of the transaction.
Telenor is the only telecom operator with significant operations in all four Nordic markets. Sweden is the largest of these markets and, to date, the market where Telenor has had the greatest growth opportunity. This acquisition provides the platform to accelerate that growth.
“With Bahnhof, we are adding a high-quality business with a strong brand, a proven track record, and operational excellence. The transaction represents an important step in delivering on our long-term strategic ambitions and strengthening our Nordic presence,” says Schilbred Fasmer.
“The acquisition will increase Telenor’s consumer subscriber market share from approximately 15% to approx. 27%. Following completion, Bahnhof will continue to operate under its own brand, maintaining its established focus on privacy, security, and technical expertise. Telenor intends to build on Bahnhof’s market position while combining the capabilities of both organizations,” Telenor said further.
“This is an important step for Telenor in Sweden. Bahnhof brings a strong team, a loyal customer base, and complementary capabilities. Together, we will be better positioned to offer competitive and relevant services to customers across Sweden,” remarked Jonas Eden, CEO of Telenor Sweden.