FINLAND - Varma Mutual Pension Insurance Company has acquired a 10.4% holding in telecommunications company Elisa Corporation, in a deal backed by the Finnish government.

The pension fund, which has assets of €28.6bn, is an active investor in Finland with 34% of its listed equities, or €3.7bn, based in the country, and specifies "a Finnish investment takes priority if the return expectations and quality criteria are met".

Officials have now confirmed it has purchased a 10.4% holding previously owned by Novator - an Icelandic alternative investment firm founded by entrepreneur Thor Bjorgolfsson - raising Varma's stake in Elisa to 12.2%.

Risto Murto, chief investment officer at Varma, said: "Elisa is a Finnish company with a good financial standing and a good record as a distributor of dividends. We regard it as a good investment even in a challenging market situation."

A further transaction means the pension fund technically owns 15.73% of Elisa making it the biggest shareholder, however as part of the deal in buying Novator's shares Varma has the option to sell at least 50% of the 10.4% holding to the Finnish government at the same price it paid - €11.20 per share.

The Finnish government confirmed under the terms of the deal Varma will be the owner of the shares, although it will retain the right to sell at least half the shares to use "in its own discretion after the Finnish State has made the necessary financial arrangements".

Jyri Häkämies, the minister for defence, claimed Elisa is an "important contract party" for the Finnish state in addition to being "an essential telecommunications company for the national security of supply".

He added: "Stabilising its ownership base fits very well in the Finnish state's role as a so-called anchor owner. It was therefore important that Novator shares went to a non-speculative owner."

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