French billionaire Xavier Niel expands telecom empire with $1.26B Tele2 deal

French billionaire Xavier Niel is to acquire 19.8 per cent of Swedish telecom company Tele2 for $1.26 billion via Freya Investissement, an investment vehicle jointly controlled by French telecom group iliad and its Chairman and founder Xavier Niel through NJJ Holding.

The $1.26 billion deal will see Swedish investment giant Kinnevik sell its 20.7 million Class A shares at SEK 101 ($9.81) and 116.9 Class B shares at SEK 93 ($9.03). At an average price of SEK 94.2 per share, this represents a 13 per cent premium on Tele2’s Class B share price as of Nasdaq Stockholm’s Friday closing bell.

The transaction will be completed in three steps, with Freya acquiring 31.3 million Class B shares for SEK 2.9 billion ($282 million), a move that will provide Frey with 4.5 per cent of the economic interest and 3.5 per cent of the voting interest in Tele2.

Phase two will see Freya acquire 14.2 million Class A shares and 85.5 million Class B shares in Tele2 for SEK 9.4 billion ($913 million) following foreign direct investment clearances in Sweden, Latvia and Lithuania, which are expected during the second quarter of 2024, thus upping Freya’s economic interest to 18.8 per cent and voting interest to 28.8 per cent.

Concluding the deal, Freya will acquire Kinnevik's remaining 6.5 million Tele2 Class A shares for SEK 700 million ($68 million) after receipt of necessary regulatory clearances, and subject to reclassifying Tele2 Class A shares into Class B shares, a move that would effectively give Freya less than 30 per cent of the voting interest in Tele2, and an economic interest of 19.8 per cent.

Thomas Reynaud, Group CEO of iliad and director of Freya Investissement, shared:

"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."

Lead image: Xavier Niel. Photo: Joël Saget AFP