The marriage of Sweden's Telia and Norway's Telenor is the latest in a series of link ups among telecoms firms.

"We will now set off at full speed to reach our goal of creating an international, growth oriented telecom company," a Telia statement said.

Nordic duo hope to become a global power

Swedish industry minister Bjorn Rosengren said the group would have a value of at least 300 billion Swedish krona ($35.95bn) after a partial privatisation scheduled for the end of this year.

By the end of 2000 the stakes of each government would be reduced to no more than 33.4% in the company which will have its headquarters in Stockholm.

Mr Rosengren has been in talks with his Norwegian counterpart for more than two months to reach a final agreement. It was reportedly delayed because of disagreements over the location of several of the new group's divisions.

Analysts expect the merger to be approved by the Swedish and Norwegian parliaments.

International ambitions

The new group said it would expand its international presence and make acquisitions, possibly first on the mobile telecoms side.

It would use its technological advances in mobile communications, satellite and Internet to expand internationally, especially in Europe, it said.

Scandanavia currently leads the world in mobile phone usage.

The group said it estimated that half the its sales would come from operations outside of Sweden and Norway within five years.

Cost savings

The Telia-Telenor group was expected to produce cost savings of at least 20bn krona(�1.5bn), but possibly as many as three times that, said Mr Rosengren.

Sweden would initally have a 60% stake in the merged group, while Norway would have a 40% stake.

Telia has 34,000 employees and posted a turnover of 51.24bn Swedish krona(�3.86bn) in 1998, compared with Telenor's 21,000 staff and operating revenues of 28.4bn Norwegian kroner(�2.2bn).

The Norwegian firm's chief executive Tormod Hermansen will take over as chief executive of the merged group while the current Telia chief executive Jan-Ake Kark, will become the first deputy chief executive of the company.

Wave of mergers

Scandanavia's biggest companies have been involved in a whirlwind of international link-ups.

This merger comes in the wake of Ford's �3.89bn takeover of Sweden's Volvo in January, and the �43bn merger of Swedish and British drugs giants, Astra and Zeneca.

Ericsson, the Swedish owned mobile phone company, is involved in the Symbian joint venture with British firm Psion to develop wireless Internet services.