Polhem Infra, the joint venture owned by three Swedish national pension funds, is taking its first step into digital infrastructure by buying the data carrier subsidiary of Sweden’s Telia for SEK9.45bn (€900m).

The two companies said they had signed an agreement for Polhem Infra to acquire Telia Carrier on a debt-free basis.

The deal includes a strategic partnership agreement, under which Telia Carrier and Telia Company will continue to work together to provide services and develop new solutions for customers, Polhem Infra said.

Mikael Lundin, chief executive officer of Polhem Infra, which was established in April last year by AP1, AP3 and AP4, said: “We are investing in an already-established company, which has been developed over three decades by Swedish Telia Company.

“Telia Carrier manages and operates backbone fibre networks for digital communication. We see it as a long-term investment in digital infrastructure, one of our core areas,” he said.

Since it was set up a year and a half ago, Polhem Infra has invested in Nordic renewable energy firm Solör Bioenergi and the new Skaftåsen wind farm in Härjedalen in Sweden, but this is the first time it has invested in digital infrastructure.

Telia said the subsidiary it was selling held the top position in the global ranking of companies with internet backbone networks, and that content, services and operator customers of Telia Carrier accounted for 65% of global internet routes.

Lundin said his company’s strategy was to create value by investing in owners and operators of infrastructure assets providing essential services to society, and that according to an overall assessment, internet traffic was expected to grow by around 25% a year.

“Among other things, the transition to 5G and the development of the ‘internet of things’ is expected to drive the increase,” he said.

Telia announced that alongside the disposal, its board had decided to propose an additional dividend of SEK0.65 per share, effectively reinstating the 2019 dividend of SEK2.45 per share which had been originally proposed in January.

That proposal had been revised in March due to the effects of the pandemic.

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