Silknet acquires Geocell
January 29, 2018
Georgian multiplay telco Silknet has acquired Geocell, the second-largest mobile telecommunications operator in the Republic of Georgia from Geocell’s shareholders, Telia Company and Turkcell in a $153 million (€123m) transaction which combines Silknet’s broadband, pay-TV and fixed telephony operations with Geocell’s mobile operations, creating a major convergent telecoms company.
The acquisition will be financed through a combination of debt – a syndicated loan arranged by TBC Bank with other Georgian and regional banks – and equity. The transaction creates a major convergent telecoms operator in the Republic of Georgia, combining the assets of the country’s largest fixed-line company, Silknet, with the mobile telecommunication activities of Geocell.
Georgian consumers can expect significant benefits from the combination, thanks to new planned convergent broadband, pay-TV, mobile and fixed telephony offerings, including enhanced mobile access to Silknet’s exclusive content such as global sport competitions. Silknet is Georgia’s largest fixed network operator and has a market share of 41 per cent of the Internet market in Georgia and 48 per cent of the fixed telephone market. Silknet is owned by three local investors – George Ramishvili, Alex Topuria and David Borger.
“This transaction allows us to create an integrated telecommunications operator, combining fixed line and mobile technologies. The larger scale will provide the company with superior access to international capital markets, further ensuring continuous investment in new technologies. Our subscribers will greatly benefit from these endeavours, as we strive to provide Georgian consumers with even better products, services and content,” said Ramishvili, the Chairman of Silknet and of its parent company, Silk Road Group. “We are delighted to welcome to the Silknet team Geocell’s first-class employees and its corporate culture of excellence. This transaction furthers our long tradition of integrating Georgia with the wider world, and we expect that it will strengthen the development of Georgia’s digital infrastructure.”
“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,” commented Johan Dennelind, President and CEO of Telia Company.
Subject to approval of the local regulatory authorities in Georgia, the acquisition is expected to be completed in the second quarter 2018.