Luxembourg-based Societe Europeenne de Communication SA (SEC), a holding company with interests in a variety of telecoms businesses across Europe, has acquired a 24.8% stake in NetCom ASA, a Norwegian GSM operator that is expanding into other services.
SEC acquired the shares in an entirely stock-based transaction from Swedish telco NetCom AB, which thus becomes the owner of some 17.8% of the Luxembourg company. Meanwhile the Swedish operatorÆs owner, the Stockholm-based Kinnevik group, has a further direct holding in SEC, alongside another Luxembourg group, Millicom International.
The Kinnevik group offers fixed-line and ISP services in Scandinavia under the Tele2 brand name, while SEC exploits the same brand in the rest of Europe. SEC CEO Anders Bjorkman said the logic behind the transaction was that Norwegian NetCom has expanded beyond its original GSM activities in recent times (NBD 11/16/99), getting into internet service provision, as well as fixed-line services for business customers.
As such, it has increasingly been coming into competition with the Norwegian branch of Tele2, so that the transfer of the shares to SEC avoids the likelihood of competitive conflict within the Kinnevik group. Meanwhile for NetCom ASA, argued Bjorkman, the transaction opens the way to international expansion via SEC. For the Luxembourg company itself, he went on, it represents a considerable strengthening of its balance sheets, improving its standing for future borrowing programs.
