Russian mobile operator VimpelCom Ltd. has signed a deal to combine itself with Egyptian billionaire Naguib Sawiris, including almost half of Orascom Telecom Holding SAE, for US$6.8 billion in stock and cash.
The deal will be the world’s fifth-largest mobile telecom by subscribers, merging Russia’s second-biggest mobile operator with the leading player in the Arab world. It symbolizes VimpelCom’s first move in a policy of expanding abroad after its Russian and Norwegian shareholders resolved their differences.
According to earlier reports, Sawiris’s Greek unit, Wind Hellas Telecommunications SA, was excluded from the deal, which gives the Sawiris a smaller stake in VimpelCom and less cash. All of Italian Wind Telecomunicazioni was included in the merger.
According to a joint press release, Sawiris’s Weather will get 326 million new common shares, comprising a 20% economic interest and 18.5% voting interest in the larger VimpelCom group, as well as US$1.8 billion in cash. Telenor ASA’s economic interest will fall to 31.7%, with its voting interest slipping to 29.3%, while Russian Alfa Group’s Altimo holding will have 31.4% of economic rights and 36.4% of voting.