Sweden's

Telia

on Friday agreed to pay around $2.6 billion to take a controlling interest in Norwegian mobile-phone operator

NetCom

, short-circuiting last month's unsolicited bid by

Tele Danmark

(TLD)

.

Telia said it bought about 36% of NetCom's voting shares and took options that would bring the total to 51.6%. Telia intends to make a cash offer to buy the remaining outstanding shares, though Tele Danmark, Telia's chief rival, says it doesn't intend to sell its 40% stake. Tele Danmark shares slid 5/8, or 1.6%, Friday, to close at 37 5/8.

Copenhagen-based Tele Danmark last month made a $1.6 billion bid for a controlling stake in NetCom. But NetCom, Norway's No. 2 mobile-phone operator, rejected the offer as insufficient, setting off a bidding war capped by Friday's Telia deal. (

TheStreet.com

reported in May that NetCom was on the block.)

Since its initial bid in May, Tele Danmark considered boosting its offer, but was discouraged by majority shareholder

SBC Communications

(SBC)

, according to a person close to the deal. SBC was concerned that a richer deal would dilute Tele Danmark's earnings, the person says. SBC officials didn't return calls seeking comment, and Tele Danmark officials couldn't be reached. "U.S. companies should not bank on their ability to pay attention to Europe in a couple of years," the person says. "Their assets in Europe lose strategic value this way."

The deal also revives Telia's fortunes in Norway, where a merger with

Telenor

, the nation's leading phone company, collapsed in December.

Norway is a small market with heavy mobile-phone penetration. NetCom has about 700,000 subscribers and is seen as likely to win one of Norway's four licenses for universal mobile telecommunications services. Those services, known as UMTS, will enable telecom operators to rapidly transmit voice, video and text and provide Internet access on mobile devices.