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Mergers & acquisitions

SFR Buys Tele2 Unit

STOCKHOLM -- Tele2 AB, ("Tele2"), (Stockholm Stock Exchange: TEL2 A and TEL2 B), Europe's leading alternative telecoms operator, today announced that it has sold its fixed and broadband businesses in France to SFR. SFR will pay cash and will acquire these businesses on a debt free basis, for approximately BSEK 3.3. Tele2's French mobile business is being retained by Tele2. The sale of the French fixed line and broadband business will result in a capital loss of BSEK 1. Meanwhile, Tele2 has made a valuation of the group's remaining goodwill and has decided to book a loss related to that, of BSEK 3.0 to 3.5 in the third quarter, 2006. The reported losses will have no cash effect on Tele2 but are adjustments of the current values from the SEC acquisition in 2000.

The estimated acquisition price is based on Tele2's fixed line and broadband customer numbers forecasted as at the end of October, 2006. However, the final acquisition price is dependent on the exact number of Tele2's fixed line telephony and broadband customers at the time of closing, which is estimated to be by the end of October. The agreement is subject to clearance from the French competition authorities. The majority of Tele2 employees in France will transfer to SFR as part of the agreement.

SFR will operate the acquired customer base under the Tele2 brand name for a maximum period of three years. Tele2 will continue to operate its French Mobile business using the Tele2 Mobile brand name.

Tele2 AB (Nasdaq: TLTO)

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