May 23, 2019 / 8:21 AM / a month ago

UPDATE 1-Sweden's Tele2 agrees deal to exit Kazakhstan

(Adds detail, background)

STOCKHOLM, May 23 (Reuters) - Telecom operator Tele2 said on Thursday it has agreed with Kazakhtelecom to sell its share in their joint venture to its partner so it can focus on Nordic and Baltic markets.

Tele2 and the Kazakh state-controlled telecommunications firm formed the joint venture in 2015 to combine their mobile businesses in the country.

The Swedish company said in December that it had initiated a sale process of its 49 percent stake in the venture after Kazakhtelecom struck a deal to buy a 75 percent stake in mobile operator Kcell from Telia and Turkcell .

“When Kazakhtelecom signed its deal with Telia and Kcell, it triggered the option and we chose to use it,” a Tele2 spokesman said, adding the deal was in line with the firm’s strategy to focus on the Nordic and Baltic markets.

Tele2 said in Thursday’s statement it will get net proceeds, after deducting the existing earn-out liability, of $169 million, and full repayment of its shareholder loan of around 2.1 billion crowns ($218 million).

It added that the deal valued the joint venture at an enterprise value of $800 million, while the transaction was expected to close at the end of June.

Sweden’s Telia, a competitor to Tele2, is also focusing on its Nordic and Baltic home markets after retreating from central Asia, a previous source of growth.

$1 = 9.6415 Swedish crowns Reporting by Helena Soderpalm; Editing by Simon Johnson; Editing by Elaine Hardcastle

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