Tuesday, October 5, 2010

Russia's Vimpelcom Bids to Become Fifth Largest Global Operator

Russia's Vimpel-Communications has struck a deal with Egyptian billionaire Naguib Sawiris to acquire Weather Investments S.p.A, which owns 51.7% of Orascom Telecom (Egypt) and 100% of Wind Telecomunicazioni (Italy).

Under the deal, Weather shareholders will contribute to VimpelCom their shares in Weather in exchange for a consideration consisting of 325,639,827 newly issued VimpelCom common shares, US$1.8 billion in cash and certain assets that will be demerged from Orascom Telecom and from Wind Italy. The Weather interests in these assets, which principally comprise Orascom Telecom's investments in Egypt and North Korea, will be transferred to the current Weather shareholders. Wind Hellas Telecommunications S.A. in Greece is entirely excluded from the transaction.

Vimpelcom said the acquisition will make it the world's fifth largest mobile telecommunications carrier by subscribers with pro forma net operating revenues of US$21.5 billion and pro forma EBITDA of US$9.5 billion for 2009. The combined company would have operations in 20 countries with a combined population of 850 million. Based on 2009 pro forma revenues, the existing operations in Russia will represent 35% and Wind Italy will represent 34% of the combined company.

Alexander Izosimov, Chief Executive Officer of VimpelCom, added: "Today's announcement marks a transformational transaction for VimpelCom. 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.

Although its major operations are in Russia, Ukraine, Kazakhstan, Uzbekistan, Tajikstan, Georgia, Armenia, Kyrgyzstan, Vietnam and Cambodia, VimpelCom is based in Amsterdam. Weather Investments provides services to 123 million subscribers in Algeria, Bangladesh, Egypt, Greece, Italy, Pakistan, Tunisia and North Korea.