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March 3, 1999

SCANDINAVIAN SERVICES FIRMS MERGE TO FORM $1BN COMPANY

By CBR Staff Writer

Scandinavian IT services companies, Tieto Corp Oyj and Enator AB announced plans for what they styled a merger of equals yesterday, intending to create one of the largest suppliers of IT services in Europe. Under the agreement, Espoo, Finland-based Tieto will acquire Kista, Sweden-based Enator in a stock swap worth just over $1bn. The combined entity is to be known as Tietoenator, and will have a market valuation of around $3bn. Shares will be listed in both Stockholm and Helsinki. Last year, revenues for the two approached $1.2bn, with profits of $114m, and the combined firms had 10,335 employees at the end of 1998. The two major shareholders, the Robur fund (which has an 11.2% stake in Enator) and Finnish telecommunications firm Sonera Ltd, the former Telecom Finland (which has a 26.8% stake in Tieto) are both said to be happy with the deal. Sonera is Tieto’s largest customer. The firms cited increasing competition and customers consolidating into larger entities as the main motivation for the merger. Tietoenator will operate beyond the Nordic region, concentrating on vertical markets such as banking and finance, telecommunications, forest and public sectors, as well as processing and support services, personnel administration services and embedded systems. Tieto was originally known as Tietotehdas Oy, founded in 1968, but changed its name in 1996 when it merged with the VTKK Group Oy and Unic Oy. Enator was originally three companies: Telub, Enator and Dialog, which were merged under a parent company, Celsius Information System, in 1994. A fourth company, Anedata, was added in 1996, and spun-off from Celsius as Enator.

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