By Dominic Chopping

STOCKHOLM--Scandinavian telecom operator TeliaSonera AB (TLSN.SK) said Tuesday it will merge its two Lithuanian subsidiaries, strengthening its Baltic operations as part of a new strategic focus.

Fixed line operator TEO LT AB (TEO1L.LV), in which TeliaSonera owns an 88.2% stake, will buy Telia's wholly-owned mobile operator Omnitel for 220 million euros ($246 million), in a deal expected to generate annual savings of around EUR10 million.

"Consumers no longer make a distinction between fixed and mobile services and the demand for converged offerings are steadily increasing," Teo Chairman Robert Andersson said. The combination will strengthen its market position through clear synergies and enhanced customer proposition, he said.

Teo will use external financing for the acquisition and TeliaSonera's ownership in Teo will remain at 88.15% following the deal.

The acquisition is expected to be finalized in the first quarter of 2016 at the latest.

TeliaSonera has recently made a strategic shift away from its troubled Eurasian operations to focus more on its Swedish and European businesses. It has combined its commercial and technology divisions and is currently evaluating its Danish business after the European Commission blocked plans to merge with Telenor's Danish operation.

-Write to Dominic Chopping at dominic.chopping@wsj.com; Twitter: @WSJNordics

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(END) Dow Jones Newswires

October 06, 2015 02:49 ET (06:49 GMT)

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