TELNY Acquires GlobalConnect's Norwegian Consumer Unit for NOK 6B

In a deal valued at NOK 6 billion, Telenor ASA (TELNY) is acquiring the consumer business of GlobalConnect in Norway, a transaction that includes critical fiber infrastructure and approximately 140,000 fiber customers. The initiative highlights Telenor’s long-term strategy to expand its fiber footprint, drive innovation and deliver superior services to even more Norwegian households.

By integrating GlobalConnect’s consumer fiber network into its own, Telenor is likely to expand its reliable, high-performance services to a broader customer base across Norway. The transaction is set to generate significant synergies with existing operations and establish a robust platform for sustained growth. This move increases Telenor’s fiber market share from 22% to 29%, according to 2024 NKOM data. In a market often described as fragmented, this scale is vital for delivering both operational and financial stability.

TELNY’s Deal a Win for Both Customers & Employees

In addition to expanded coverage, customers transitioning to Telenor will likely gain access to a comprehensive suite of services, including advanced digital security and secure Wi-Fi solutions, premium home networks and diverse entertainment options, all offered by TELNY’s industry-leading connectivity and customer care. The company is doubling down on its promise to be “all of Norway’s safety net,” with continued investments in fraud prevention, secure Wi-Fi and digital protection.

The deal also aligns with GlobalConnect’s evolving strategy. It will continue to prioritize its B2B and carrier segments in Norway, with ongoing investments planned in these strategic areas.

TELNY Gains Financial Synergies & Long-Term Growth

Apart from the benefits for Telenor’s business and customers, this deal is a good financial move. GlobalConnect’s consumer business in Norway generated more than NOK 0.6 billion in revenues in 2024. Post-acquisition, TELNY expects to achieve EBITDA of around NOK 0.3 billion annually during the first two years after integration and restructuring, with free cash flow ramping up to a NOK 0.45 billion run-rate by 2028.

By integrating operations and leveraging economies of scale, management anticipates annual cost savings of approximately NOK 0.15 billion. These efficiencies will primarily come from backbone network integration, as well as optimizations across sales, operations and maintenance. It estimates integration capex of roughly NOK 0.3 billion over 2026-2028, most of which is expected to be incurred in the first two years to ensure a smooth transition and unlock long-term value.

While the transaction is still subject to approval by the Norwegian Competition Authority, it is a prudent investment in Norway’s digital future, with benefits for customers, employees and the broader society.

With this acquisition, Telenor is not only growing its network but also empowering the next generation of Norway’s digital economy.

TELNY’s Zacks Rank & Stock Price Performance

Currently, Telenor carries a Zacks Rank #3 (Hold). Shares of the company have gained 35.9% in the past year compared with the sub-industry’s growth of 6.8%.

Stocks to Consider From the Computer & Technology Space

Some better-ranked stocks from the broader technology space are NETGEAR, Inc. (NTGR), Ubiquiti Inc. (UI) and Cognizant Technology Solutions Corporation (CTSH). NTGR currently sports a Zacks Rank #1 (Strong Buy), while UI and CTSH carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NETGEAR’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 179.12%. In the last reported quarter, NTGR delivered an earnings surprise of 105.71%. Its shares have gained 105.7% in the past year.

Ubiquiti earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 29.93%. In the last reported quarter, UI delivered an earnings surprise of 61.29%. UI shares have skyrocketed 177.5% over the past year.

Cognizant’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 6.38%. In the last reported quarter, CTSH delivered an earnings surprise of 3.36%. Its shares have grown 19.2% in the past year.

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This article originally published on Zacks Investment Research (zacks.com).

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