Welho to Be Merged into DNA

Stock Exchange Release 31/5/2010  9:00 Sanoma Group's Sanoma Entertainment division has agreed to sell its Welho business to the DNA telecommunication group. As part of the transaction, DNA will carry out a directed share issue to Sanoma, which will become DNA's second largest owner with an ownership of 21%. The transaction is subject to approval by the competition authorities and the Council of State. Both approvals are expected during the summer. The selling price of the Welho business is EUR 200 million. Sanoma will record a non-recurring capital gain of approximately EUR 185 million. The capital gain will improve Sanoma's earnings per share (EPS) by about EUR 1.14 in 2010. Welho is Finland's largest cable TV operator, providing versatile pay TV and broadband services. In 2009, Welho's net sales amounted to EUR 67 million and it employed 205 people. During 2007-2009, the compound annual growth rate (CAGR) of Welho's net sales has been 6%. Welho's personnel will continue to work under current employment conditions and the services provided to Welho's customers will remain unchanged for now. DNA Ltd is a Finnish telecommunication company providing voice, data and mobile communications and TV services. DNA Group's net sales were EUR 652 million and operating profit excluding non-recurring items EUR 63 million in 2009. DNA has around 2.6 million customers. "We will gain a share in a very profitable and competitive company with great growth potential. This is a long-term strategic ownership for us as we believe that media and telecommunication businesses are converging further. Through this transaction we are able to participate in developing the industry," says Hannu Syrjänen, President and CEO of Sanoma. "Welho has invested significantly in developing its network and services, and is now in very good shape. Together, Welho and DNA form a strong national telecommunication player that has the muscle for further development," adds Sanoma Entertainment's President Anu Nissinen. "The transaction will provide DNA with a significant share of the broadband and TV business in the Helsinki metropolitan area, where we haven't had presence so far. Welho and DNA are a natural fit, with no significant overlapping operations - and together form an extensive, complementary whole," comments DNA's President and CEO Riitta Tiuraniemi. Following the deal, the Sanoma Entertainment division will comprise Nelonen Media's TV and radio business as well as Sanoma Games' online casual gaming services. It will be reported as a single entity. Sanoma will hold a conference call regarding the deal for analysts, investors and media in English, on Monday, 31 May 2010 at 13:30 (Finnish time). To join the conference call, please dial +44 (0)20 7806 1968 (Europe) or +1 718 247 0884 (US) (confirmation code 5704958). Sanoma Corporation Kim Ignatius Chief Financial Officer Additional information: President and CEO Hannu Syrjänen, Sanoma, tel. +358 10 519 5020 President Anu Nissinen, Sanoma Entertainment, tel. +358 10 707 7000 President Riitta Tiuraniemi, DNA, tel. +358 290 996 201 Sanoma Group Communications, tel. +358 10 519 5062, communications@sanoma.com Analysts and investors: Sanoma IR, tel. +358 10 519 5066 and +358 10 519 5064, ir@sanoma.com Sanoma.com Welho is the largest cable TV operator in Finland and a significant broadband service provider. More than 320,000 homes are connected to Welho's cable network in the Helsinki region. Welho has over 140 digital TV channels in its offering, including the largest HDTV service in Finland, 20 HD channels in total. In autumn 2009, Welho reached number one position in the EPSI Rating Broadband customer satisfaction survey, for the fourth year in a row. Welho is part of the Sanoma Group, a strong European media group operating in diverse fields of media in over 20 countries. DNA Ltd is a Finnish telecommunications company providing high-quality, state-of-the-art voice, data and mobile communications and TV services to private customers, organisations and corporations. DNA Group's turnover was EUR 652 million and profit excluding nonrecurring items EUR 63 million in 2009. DNA has around 2.6 million customers. For further information, visit www.dna.fi . [HUG#1420141]