Swedish firms Connecta and Information Highway Thursday merged in a deal that stands to accelerate the combined company’s efforts to mount an aggressive global expansion.
Information Highway will offer 3.37 new shares for each existing Connecta share. A total of 57 million shares will be
issued if all shareholders accept the agreement. Information Highway
shareholders will hold 49 percent of the new company, while Connecta will
hold the majority 51 percent. The new company will be capitalized with SEK
13.5 billion ($1.5 billion).
Connecta and Information Highway plan to launch a full-scale international
expansion strategy as well as a renewed effort to cater to multinational
corporations. Connecta kicked off this pursuit with a coinciding
announcement of the purchase of Albatros Network A/S in Denmark. Information
Highway currently operates in Norway, Denmark, Finland and the U.K.
In a joint statement, the companies said that the merger was rationalized by
a similarity of vision, structure, client base and corporate culture. The
duo also claimed that Information Highway’s Linux and wireless expertise
complemented Connecta’s e-commerce strengths.
The two companies are already in talks with companies in Germany and the
U.K., and has acquisition aims in France, Spain and Italy as well as future
plans for the China market, but does not intend to enter the U.S., according
to an Bloomberg interview with Information Highway chief executive Goeran
Waagstroem.
Trading on the two companies was halted yesterday on the OM Stockholm
Exchange following speculation on the impending merger.