Telenor reportedly plans €2bn sale of assets in Bulgaria, Serbia and Montenegro

Telenor reportedly plans €2bn sale of assets in Bulgaria, Serbia and Montenegro
By bne IntelliNews January 20, 2018

Norwegian telecommunications group Telenor is understood to be in talks with an unnamed US fund on the sale of its assets in Bulgaria, Serbia, Montenegro and probably Hungary for €2bn. 

The potential buyer will get access to some 10mn clients in the four countries, though it is still unclear whether the sale will include assets in Hungary. 

The news was initially reported by Mergermarket, and Bulgarian news outlet Capital later reported it has received confirmation from one unnamed source that Telenor entered into exclusive talks with the fund in December 2017. The company has not yet confirmed the information. 

The name of the buyer is unknown, but a source quoted by Capital said it does not have presence on the SEE mobile phone market. There is also speculation the investor could be US fund KKR, which owns a satellite TV operator in Serbia.

In Bulgaria, Telenor entered the market in 2013, acquiring mobile operator Globul and retailer Germanos Bulgaria from Greece's OTE for €717mn, later merging the two companies. In the first nine months of 2017, Telenor Bulgaria's earnings before interest, taxes, depreciation and amortisation (Ebitda) edged down 0.2% y/y to some €99mn.

On the Bulgarian market, Telenor competes with Mtel - the local unit of Telekom Austria, and Bulgarian telecommunications group BTC, which operates under the brand Vivacom.

Telenor entered the Serbian market in 2006, acquiring a 70% stake in Mobi63 for €1bn. Subsequently, the Norwegian company also acquired the remaining 30% stake. Its wireless unit competes with Telekom Srbija's mobile arm, MTS, and VIP Mobile, a unit of Telekom Austria Group. 

The company said in 2016 that it planned to invest over €40mn in the development of 4G services for the Serbian market during the year, and could launch 5G services by 2020. 

In Montenegro, Telenor has owned the biggest telecommunications company since 2004. It competes with T-Mobile, owned by the Hungarian unit of Deutsche Telekom, Magyar Telekom, and with M:tel, which is majority owned by Telekom Srbija.

In Serbia and Montenegro, Telenor's combined Ebitda remained almost unchanged y/y at €110mn in the first nine months of 2017.