By Helena Soderpalm and Olof Swahnberg
STOCKHOLM (Reuters) - Sweden's Telia Company <TELIA.ST> announced a $1 billion (770 million pounds) deal to buy Bonnier Broadcasting on Friday, its second major acquisition in a week, as the top Nordic telecoms operator looks to expand its media business.
Bonnier Broadcasting, owned by a prominent Swedish family, includes brands such as Swedish TV4 and streaming service C More and Finnish MTV.
Telia is focused on supplying a full range of mobile, fixed line and TV operations in its seven Nordic and Baltic markets after retreating from central Asia, a previous source of growth.
Telia on Tuesday announced the acquisition of TDC's Norwegian business in a $2.6 billion deal and had previously confirmed it was in talks with Bonnier to buy the business. .
Scandinavian telecoms companies are doing deals to help them stand up to big internet players offering streaming services.
The Bonnier deal is however politically sensitive ahead of elections due in September since the Swedish government is Telia's biggest owner with 37 percent of shares. The state already controls Sweden's other big traditional broadcaster, public service television network SVT.
"As a citizen I think it is strange that the state can control both public service and, if the deal goes through, the biggest commercial TV channel," said Georgi Ganev, CEO at Kinnevik <KINVb.ST>, owner of several Nordic telecom and media firms.
Telia said it would take its role "most seriously" and continue to handle it responsibly. The government said it would meet the board later on Friday to discuss the issue, according to news agency TT.
Telia said it would pay 9.2 billion crowns ($1.03 billion) on a cash and debt free basis, with a potential additional amount of maximum 1 billion based on future operational revenue and EBITA performance.
A source told Reuters late on Thursday that Telia had pushed for a deal valued below the 10-12 billion Swedish crown range that local media reported in May.
Bonnier Broadcasting had sales of 7.5 billion Swedish crowns last year and an operating profit (EBITA) of 423 million crowns.
Telia said Friday's acquisition was expected to generate synergies from 2020 with a full run-rate of 600 million crowns in 2022. It will establish a new business area, where the firm's existing TV business and Bonnier Broadcasting will be included.
Bonnier operates publishing, e-commerce and film businesses in more than a dozen countries.
Telia announced a retreat in 2015 from central Asia after former management became embroiled in a bribery scandal in Uzbekistan.
Analysts had raised concerns the move into media could dilute the focus on Telia's core telecoms business, threatening dividend payouts in the longer term.
But the company reassured investors that this was not the case.
"The acquisition of Bonnier Broadcasting will not affect Telia Company's share buy-back program or dividend policy," Telia said in a statement.
Chief Executive Johan Dennelind said on Friday he now saw no room for further major purchases after the two deals this week.
Telia shares slipped 3 percent to 38.62 crowns by 0815 GMTin early trade. The company also reported second quarter earnings in line with expectations.
The media landscape is changing in the region under pressure from U.S. media giants.
In Scandinavia this year, Tele2 <TEL2b.ST> has agreed to buy cable-TV firm Com Hem <COMH.ST>, while Modern Times Group <MTGb.ST> said it would split in two, demerging its Nordic TV business and listing it on the stock exchange.
(Reporting by Olof Swahnberg and Helena Soderpalm; Editing by Niklas Pollard Stephen Coates)