TDC has sold its Swedish arm to Tele2 as it looks to focus its resources on Denmark and Norway.
The SEK2.9 billion deal marks the end of the strategic review that TDC launched in January.
TDC Sweden is an enterprise-focused business with a range of public and private sector customers.
The company, which has 810 full-time employees, recorded EBITDA of SEK0.4 billion on revenues of SEK3.4 billion last year.
Tele2 said the deal would enable it to compete more strongly in the enterprise market.
To fund the acquisition, it plans to launch a SEK3 billion rights issue.
It said it expected opex and capex synergies of SEK500 million, while integration costs would be SEK 750 million.
Tele2 President and CEO Allison Kirkby said: “This deal is a unique opportunity for Tele2 to build scale and expand its range of services in the B2B market, it is hugely complementary to our existing Swedish business, and it allows us to meet the global trend of large B2B customers demanding a wider range of communication & network services.”
Subject to regulatory approval from the European Commission, the transaction is expected to close in the fourth quarter of this year.
TDC Group CEO and President Pernille Erenbjerg said: “With the sale to Tele2, we have found a good long-term owner who stands to achieve considerable synergies and will therefore be able to invest in further developing the business.
“At the same time, we have found a good business partner for both our Danish and Norwegian business customers as well as wholesale customers.
“The customers will be in safe hands with Tele2, and through the sale, we have achieved a higher value than we would have been able to gain by a continued ownership of TDC Sweden.”