Vimpelcom creates new mobile giant with Egypt tycoon
Norwegian-Russian telecoms firm Vimpelcom on Monday signed a multi-billion dollar deal with Egyptian billionaire Naguib Sawiris to create the world's fifth largest mobile operator.
Vimpelcom will acquire all of Italian mobile operator Wind and a majority in Egypt's Orascom Telecom from Sawiris' holding firm, which will in return receive a cash payment and substantial stake in the enlarged company.
The agreement will create the world's fifth largest mobile telecoms carrier by subscribers, with pro forma operating revenues of 21.5 billion dollars, Vimpelcom said in a statement on its website.
"At the closing of the transaction, Vimpelcom Ltd will own 51.7 percent of Orascom and 100 percent of Wind," Vimpelcom said in a statement.
The shares are being acquired from the Weather Investments holding company of Sawiris, one of the richest men in the Middle East who is estimated by US Forbes magazine to have a total fortune of 2.5 billion dollars.
The overall value of the transaction was not disclosed but Russian business daily Vedomosti said it would be worth 6.4 billion dollars.
Vimpelcom said that as part of the transaction, Weather Investments will receive a 20 percent economic stake and a 18.5 percent voting stake in the enlarged Vimpelcom group.
Vimpelcom is a joint venture of Norwegian telecoms firm Telenor and Russian banking group Alfa Group, whose creation was sealed at the end of 2009 after a prolonged squabble between the two groups.
After the transaction, Telenor will hold 29.3 percent of the voting rights in Vimpelcom and Alfa Group 36.4 percent.
Jo Lunder, the Chairman of Vimpelcom, said: "This combination creates a top tier global telecoms company with strong platforms across Europe, Asia and Africa."
Naguib Sawiris said: "This landmark transaction is a true reflection of the high quality of our Orascom Telecom and Wind Italy assets and of the significant value that we have created over the years for our shareholders.
"We share a common vision with our new partners at Vimpelcom of the exciting prospects of our new, enlarged and diversified telecoms platform," he added.
The cash and shares transaction also includes a 1.8 billion dollar payment in cash.
Reports of the deal saw Orascom shares jump more than three percent on the Cairo stock exchange when they were suspended as the regulator asked the company to clarify the reports.
There has been controversy over the role of Orascom's Algerian operation Djezzy in the deal but Russian press reports said that these would be ironed out during a visit by President Dmitry Medvedev to the North African country this week.
Vimpelcom has licenses for operations across Russia -- where it owns top operator Beeline -- and Ukraine where it has the Kyivstar brand.
Its operations also cover the entire territories of Kazakhstan, Uzbekistan, Tajikistan, Georgia, Armenia, Kyrgyzstan, Vietnam and Cambodia.
The statement said that Vimpelcom expected the transaction to be completed by the first quarter of 2011.
Alexander Izosimov, chief executive officer of Vimpelcom, 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."
© 2010 AFP