VimpelCom, Egypt’s Sawiris Agree to Combine Phone Operations
By Jeroen Molenaar - Oct 4, 2010 5:19 PM GMT+0200
VimpelCom Ltd., Russia’s second- largest mobile-phone operator, and Egyptian billionaire
Naguib Sawiris agreed to merge their phone assets, creating the world’s fifth-largest mobile-phone company by subscribers.
Under the terms of the transaction, VimpelCom will own Sawiris’s Weather Investments SpA’s 51 percent stake in Egypt’s Orascom Telecom Holding SAE and all of Italian mobile operator Wind Telecomunicazioni SpA. Weather shareholders will get 20 percent of the merged entity.
The new company had total revenue of $21.5 billion in 2009. The deal would create an entity with a combined mobile subscriber base of more than 174 million customers and give VimpelCom, which has operations in many of the former Soviet republics, access to markets in Africa and the Middle East.
VimpelCom, with a listing in New York, was formed from the consolidation of Russian billionaire
Mikhail Fridman’s Alfa Group and Norway’s
Telenor ASA of holdings in Russian and Ukrainian mobile-phone operators.
VimpelCom is 39.6 percent-owned by Telenor while Alfa’s Altimo unit controls 39.2 percent and minority shareholders own 21.2 percent. Sawiris’s
Orascom Telecom Holding SAE is the largest publicly traded mobile-phone company in the Middle East.
It is Sawiris’s second attempt this year to sell Orascom assets, after talks with South Africa’s MTN Group Ltd. failed in June. The Algerian government blocked the sale of Orascom’s local unit, saying it would make an offer for the operations.
Wind Italy had net debt of 8.29 billion euros ($11.4 billion) as of June 30 and Orascom Telecom had debt of $4.61 billion at that date.
To contact the reporter on this story:
Jeroen Molenaar in Amsterdam at
[email protected].