Xavier Niel to acquire leading stake in Tele2

Xavier Niel (@Joel Saget/AFP; Source: Groupe Iliad)

Xavier Niel, owner of Iliad Group, is to acquire a 19.8% stake in Swedish operator Tele2 from investment firm, Kinnevik, for approximately €1.16 billion. 

Kinnevik’s stake in the operator carries 36% of Tele2 voting rights, so the acquisition stands to make telecom tycoon Niel its leading shareholder.

The deal with the Swedish conglomerate and Tele2’s lead shareholder, will be handled via Iliad and NJJ jointly owned investment vehicle — Freya Investissement.

The transaction will be facilitated in three phases, with a first close of SEK 2.9 billion. Kinnevik said the two remaining steps are subject to the companies receiving necessary regulatory clearances.

As part of the sale, Niel will own less than 30% of the voting rights in Tele2 into Class B shares which carry one voting right each. The company also joins Iliad and NJJ’s existing European telecommunications operations across France, Italy, Poland, Switzerland, Monaco, Ireland, Cyprus and Malta.

The French entrepreneur’s move into the Swedish market comes as part of of his wider plans for international expansion across the telecom and media industry. Vodafone recently rejected Niel’s offer to acquire and merge its Italian operation with its own, that would see Vodafone receive €6.6 billion of cash proceeds and €2.0 billion of shareholder loan, giving an enterprise value of €10.45 billion.

According to recent reports, Niel is also among those to progress to the second state of bidding for asset for Altice Portugal’s assets. He also bought a 6% stake in Belgium’s leading telco Proximus via his Carraun investment vehicle before the end of last year.

Phase two is expected to be completed during the second quarter of 2024 and the closing of phase three during the third quarter. Up to €500 million of the transaction will be financed by Iliad and the remaining €650 million by NJJ and Freya.

Thomas Reynaud, director of Freya and CEO of the Iliad Group, said: “The iliad Group and the Tele2 Group have a lot in common. We both believe in the power of innovation and the importance of an entrepreneurial mindset. Our business sector in Europe is highly demanding. So, we have a great deal of respect for what Tele2’s shareholders, management and teams have achieved, and we’re delighted that Kinnevik has chosen Freya as Tele2’s new reference shareholder. We look forward to contributing to the next chapter of Tele2’s growth story.”

Georgi Ganev, CEO of Kinnevik, added: “Founded by Jan Stenbeck in the early 1980’s, Tele2’s strong value creation has been instrumental in building the Kinnevik of today, fuelling its historic dividend flow to shareholders as well as Kinnevik’s strategic pivot into a leading European growth investor for which we are proud and grateful. After completion of this transaction, Kinnevik will hold a very strong net cash position. We will deploy the capital with patience and focus to bring further clarity to our equity story and value creation to our shareholders. We will continue executing on our priority to concentrate our portfolio towards our most promising and resilient companies, and review our capital structure in consultation with major shareholders.”