Vimpelcom board approves Egyptian deal
Norwegian-Russian joint venture Vimpelcom approved Tuesday the purchase of Egypt's Weather, a deal that would create the world's fifth largest mobile operator, over its partner's opposition.
"Six of the nine directors on the board voted in favour of the acquisition," Vimplecom said in a statement.
"At the same time, three directors named by (Norwegian joint venture partner) Telenor voted against," it said.
The Vimplecom partners also failed to agree on the future terms of the deal and the relationship between the various shareholders, it added.
Norwegian telecoms group Telenor said Monday it did not support the purchase of Weather, owned by Egyptian billionaire Naguib Sawiris, but with only 39.6 percent of Vimplecom and three board seats it was not able to block it.
"Telenor has determined that the proposed acquisition by Vimpelcom of Weather Investments is not in the best interests of Vimpelcom shareholders and therefore does not intend to support the transaction," the Norwegian firm said in a statement.
"We do not believe this transaction makes strategic or financial sense for Vimpelcom's shareholders," Telenor spokesman Dag Melgaard added.
The rest of Vimpelcom is owned by Mikhail Fridman's Russian banking group Alfa Group, which holds 39.1 percent, and other minority shareholders.
In October, Vimpelcom signed a 6.5-billion-dollar (4.9-billion-euro) deal with Egyptian billionaire Naguib Sawiris' Weather Investments.
The deal included Vimpelcom's acquisition of all of Italian mobile operator Wind and of a majority in Egypt's Orascom Telecom from Weather, which would create an industry giant with 174 million customers.
Alexander Izosimov, chief executive officer of Vimpelcom, at the time described the deal as "transformational" for the company.
"It offers our shareholders exposure to attractive growth markets in both Asia and Africa and the opportunity to diversify further our revenue base in terms of geography, currency and market characteristics."
The deal has already faced problems in Algeria, where the government wants to nationalise Djeezy, which is owned by Orascom Telecom.
Telenor's announcement comes a year after a five-year battle with Alfa Group over Vimplecom, which ended last October with a new agreement on the functioning of their joint venture.
© 2010 AFP