The sale follows Telia’s stated policy of offloading its operations outside Scandinavia and the Baltic to focus on its core market, though the process is running behind schedule. In October it cut its stake in Megafon of Russia.
“This transaction continues the long-term tradition of our group, which implies Georgia’s integration with the rest of the world, and we are confident that it will contribute significantly to the development of digital infrastructure in Georgia,” said Giorgi Ramishvili, chairman of Silknet.
Silknet said the purchase would be funded from its own funds plus finance from Georgia-based TBC Bank. Geocell is owned through Fintur, a holding company owned by Telia and Turkcell.
Georgia, on the eastern edge of the Black Sea, became independent from the former Soviet Union in 1991 and has a population of 3.7 million.
Johan Dennelind, president and CEO of Telia Company, said: “I’m happy to announce another step in our effort to, over time, leave Eurasia and focus on the Nordic and Baltic regions within the framework of our new generation telco strategy. I would also like to thank Geocell’s employees for their outstanding contributions and wish them all the best in the company’s next phase.”
Silknet – owned by three local investors, Ramishvili with Alex Topuria and David Borger – is Georgia’s largest fixed network operator with a market share of 41% of the internet market and 48% of the fixed telephone market. It was formerly United Telecom of Georgia and changed its name to Silknet in March 2010. It is a member of Orange’s alliance partner programme.
The deal will need approval from Georgia’s National Communications Commission but it is expected to be completed by the end of June 2018.
Silknet said that the merger would allow customers to get access to the internet, cable television, mobile and fixed telephone services, including mobile access to Silknet exclusive content.
“The increased scale will provide better access to the company with international financial markets, which allows for the continuous development of additional investments and new technologies.”
