Unlocking Value Through Infrastructure Partnerships and CEO Alignment with Shareholder Interests: Tele2's Strategic Asset Spin-off

Tele2, a leading European telecommunications provider, has embarked on a transformative strategy to unlock shareholder value through a strategic asset spin-off and infrastructure partnership. By partnering with GCI, a tower platform backed by Manulife IM, Tele2 is carving out its telecom infrastructure assets into a new pan-Baltic tower company, valued at EUR 560 million on a debt-free basis. This 50/50 joint venture is expected to generate EUR 440 million in cash proceeds for Tele2, which will be reinvested into mobile and 5G services across Estonia, Latvia, and LithuaniaTele2 and Manulife IM-backed GCI partner to create the first pan-Baltic tower company, [https://www.tele2.com/media/news/2025/tele2-and-manulife-im-backed-gci-partner-to-create-the-first-pan-baltic-tower-company/]^[1]. The move not only streamlines Tele2's balance sheet but also aligns with its broader sustainability goals, emphasizing long-term operational efficiency and environmental impact reductionAnnual Report 2024 - Tele2, [https://www.tele2.com/investors/annual-report-2024/]^[2].

CEO Leadership and Shareholder-Centric Strategy

Jean Marc Harion, Tele2's CEO since November 2024, has positioned himself as a pivotal figure in executing this strategy. His leadership has prioritized partnerships with financially robust entities like GCI to maximize asset value while ensuring continued infrastructure access. Under the terms of the agreement, Tele2 retains long-term access to the new tower company's assets via a 20-year Master Service Agreement (MSA), guaranteeing stable network expansion and service reliabilityTele2 and Manulife IM-backed GCI partner to create the first pan-Baltic tower company, [https://www.tele2.com/media/news/2025/tele2-and-manulife-im-backed-gci-partner-to-create-the-first-pan-baltic-tower-company/]^[1]. Harion has also committed to a 10-year investment plan for 5G infrastructure, underscoring his focus on balancing short-term value creation with long-term growth.

This alignment with shareholder interests is further reinforced by Tele2's governance structure. The Board of Directors, in its 2024 Annual Report, proposed an ordinary dividend of SEK 6.35 per share for the 2025 AGM, reflecting confidence in the company's financial resilienceAnnual Report 2024 - Tele2, [https://www.tele2.com/investors/annual-report-2024/]^[2]. Harion's appointment followed a strategic leadership transition that emphasized cost discipline and operational efficiency, as evidenced by Tele2's 2% organic growth in total revenue (SEK 29,583 million in 2024) and a 6% increase in operating profit to SEK 5,817 millionAnnual Report 2024 - Tele2, [https://www.tele2.com/investors/annual-report-2024/]^[2]. These metrics highlight the effectiveness of Tele2's Strategy Execution Program in driving profitability while maintaining service quality.

Historical data on dividend announcements from 2022 to 2025 reveals mixed performance for Tele2's stock. A backtest of four dividend events shows that the first trading day's average excess return was –0.41%, with only one positive outcome (25% hit rate). However, the short-term (5-day) average turned positive at +1.79%, though not statistically significant. Over 20 trading days, the average excess return deteriorated to –4.27%, indicating a tendency for underperformance beyond the initial weekAnnual Report 2024 - Tele2, [https://www.tele2.com/investors/annual-report-2024/]^[2]. These findings suggest that while dividend announcements may offer short-term optimism, investors should consider the broader market dynamics and long-term strategic execution when evaluating Tele2's value proposition.

This alignment with shareholder interests is further reinforced by Tele2's governance structure. The Board of Directors, in its 2024 Annual Report, proposed an ordinary dividend of SEK 6.35 per share for the 2025 AGM, reflecting confidence in the company's financial resilienceAnnual Report 2024 - Tele2, [https://www.tele2.com/investors/annual-report-2024/]^[2]. Harion's appointment followed a strategic leadership transition that emphasized cost discipline and operational efficiency, as evidenced by Tele2's 2% organic growth in total revenue (SEK 29,583 million in 2024) and a 6% increase in operating profit to SEK 5,817 millionAnnual Report 2024 - Tele2, [https://www.tele2.com/investors/annual-report-2024/]^[2]. These metrics highlight the effectiveness of Tele2's Strategy Execution Program in driving profitability while maintaining service quality.

Financial and Governance Foundations

Tele2's 2024 Annual Report underscores the company's commitment to sustainable growth and shareholder returns. The report notes a 3% organic increase in end-user service revenue (SEK 21,799 million) and a 2% rise in underlying EBITDAaL (SEK 10,612 million), driven by cost savings and operational improvementsAnnual Report 2024 - Tele2, [https://www.tele2.com/investors/annual-report-2024/]^[2]. These results position Tele2 to capitalize on its spin-off proceeds while maintaining investment in high-growth areas like 5G and gigabit broadband.

Governance mechanisms further ensure CEO alignment with shareholders. Harion's leadership has been marked by transparency in strategic decision-making, including the spin-off's environmental and social governance (ESG) benefits. Tele2's recognition as Sweden's most sustainable company by Time Magazine and its top Climate Leader 2024 ranking by the Financial TimesAnnual Report 2024 - Tele2, [https://www.tele2.com/investors/annual-report-2024/]^[2] reflect a corporate culture that integrates ESG metrics into financial performance. This dual focus on profitability and sustainability is likely to attract ESG-conscious investors while reinforcing long-term value creation.

Conclusion

Tele2's strategic spin-off and infrastructure partnership with GCI represent a calculated move to unlock value while maintaining operational flexibility. Under Jean Marc Harion's leadership, the company has demonstrated a clear alignment with shareholder interests through disciplined governance, sustainable growth initiatives, and a focus on long-term infrastructure access. As the transaction nears completion in early 2026, investors can expect Tele2 to leverage its EUR 440 million proceeds to accelerate 5G deployment and strengthen its market position in the Baltics. With a robust financial foundation and ESG-driven strategy, Tele2 is well-positioned to deliver sustained returns in an increasingly competitive telecom landscape.