Tele2 is selling its Austrian opco to Hutchinson Whampoa as it looks to refocus on other markets.
The €95 million transaction, which will combine Tele2 Austria with Three Austria, includes €85 million paid at closing and €10 million in the form of an earn-out depending on the success of the integration process.
Tele2 said the move would enable it to focus on growth opportunities where it can serve customers on its own infrastructure.
Its Austrian subsidiary offers fixed line and broadband services, with an MVNO launched on T-Mobile’s infrastructure in 2015.
It said Three Austria was “committed to growing the business and creating value for its customers going forward”.
The deal is subject to competition approval, expected in the next few months.
Allison Kirkby, President and CEO of Tele2 AB, comments: “Since we entered Austria in 1999 we have built a successful business and are extremely proud of the brand we have built, and the talented employees who have supported our valued customer base.
“However, to create greater value for our customers and our shareholders over the longer term, we believe Tele2 Austria will benefit from consolidation with Three Austria.
“This opportunity also enables an increased focus on successfully executing our strategy in our remaining footprint.”
Alfred Pufitsch, CEO of Tele2 Austria, comments: “The transaction will bring together two great players in the Austrian market. The combined strength will create a company that is even better at serving the Austrian customers.”
Tele2, which also operates in Eastern Europe and Asia, saw sales rise 3 percent year-on-year in the three months to June, reaching SEK7.99 billion.
However, its Austrian business saw a net sales decline of three percent during the same period although EBITDA increased by 26 percent to €49 million.