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Fri, 07 Sep 2018 12:12 - Updated Fri, 07 Sep 2018 12:12

Swedish election could put government's Telia stake in play

STOCKHOLM - Telia’s plan to buy Bonnier Broadcasting could prompt the Swedish government to sell its 37 percent stake in the telecoms firm to limit state influence over local media, particularly if the centre-right bloc wins Sunday’s general election.

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The $1 billion deal, announced in July, is politically sensitive because the government already controls Sweden’s public service television network SVT, while Bonnier’s TV4 is the Scandinavian country’s biggest commercial channel.

All the major political parties oppose the deal because it would concentrate more media power in the hands of the state. But blocking it outright could prove complicated for a government that owns stakes in many companies and would likely lead to legal battles, experts say.

European Union regulators are also examining the deal. But as their core focus is the impact on consumers, they may wave the deal through, putting the ball back in Sweden’s court.

Apart from selling its stake, currently worth about 64 billion Swedish crowns (5.4 billion pounds), Stockholm could also look at breaking up Telia, the Nordic region’s biggest telecoms company, to limit the state’s role in the media.

Much will depend on the outcome of Sunday’s election, with the minority governing Social Democrats generally in favour of keeping the Telia stake, but the opposition centre right open to potentially selling it.

“We have been clear in our party that it’s not appropriate that the state is main owner of TV4, that we are a big player in media,” said Elisabeth Svantesson, a lawmaker who speaks for the main opposition Moderate party on economic issues.

The centre-left bloc, uniting the Social Democrat and Green parties with the Left Party, currently has a slim lead over the centre-right in opinion polls, but neither is likely to win an outright majority, potentially leaving the anti-immigration Sweden Democrat party holding the balance of power.

The Sweden Democrats told Reuters they would prefer the state to keep Telia’s copper and fibre networks for national security reasons, but were open to selling the rest.

Telia wants to buy Bonnier Broadcasting to expand its media business as internet, telecoms and entertainment converge and U.S. streaming players such as Netflix and Amazon gain market share.

A majority in parliament must approve a potential sale of the Telia stake, but the final decision on whether to proceed rests with the government.Reuters

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