Vimpelcom, a Norwegian-Russian Telecom firm, has signed a deal with Egyptian billionaire ‘Naguib Sawiris’ to buy all shares of Italian mobile operator ‘Wind’ and majority in Egypt’s ‘Orascom Telecom.’
The agreement will create the world’s fifth largest mobile Telecom carrier by subscribers, with pro forma operating revenues of 21.5 billion dollars. “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 Landmark Transaction: The overall value of the transaction was not disclosed but 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. Jo Lunder, the Chairman of Vimpelcom, said: “This combination creates a top tier global Telecom company with strong platforms across Europe, Asia and Africa.” Naguib Sawiris, the Chairman of Weather, commented: “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 Telecom platform. Moreover, I am confident that our minority shareholders in Orascom Telecom will benefit from the synergies created by the combination of the two entities, especially in the area of procurement, and by the overall strengthening and de-risking of the Orascom Telecom balance sheet. I am looking forward to being fully involved in the new group and to joining VimpelCom’s Supervisory Board.”
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.
Territories Included: VimpelCom Ltd. consists of telecommunications operators providing voice and data services through a range of wireless, fixed and broadband technologies. The VimpelCom Ltd. group is head-quartered in Amsterdam and has operations in Russia, Ukraine, Kazakhstan, Uzbekistan, Tajikstan, Georgia, Armenia, Kyrgyzstan, Vietnam and Cambodia, covering territory with a total population of about 345 million. VimpelCom Ltd. operating companies provide services under the “Beeline” and “Kyivstar” brands.
Whereas, Weather Investments S.p.A. is a leading international telecommunications company offering mobile, fixed, Internet and international communication services to 123 million subscribers in Algeria, Bangladesh, Egypt, Greece, Italy, Pakistan, Tunisia and North Korea. Weather’s subsidiary Orascom Telecom Holding has an indirect equity ownership in Globalive Wireless which operates mobile services in Canada. Weather Investments operates through its subsidiaries Orascom Telecom Holding S.A.E., Wind Telecomunicazioni S.p.A. and Wind Hellas Telecommunications S.A. Weather is owned 72.65% by Weather Investments II S.a.r.l. (which is itself owned by the Sawiris family) and the balance by certain financial investors.
Estimated Timetable: Under the share sale and exchange agreement, final board and shareholder approvals for the Transaction are required to be obtained from both companies. It is expected that the VimpelCom EGM will occur before the year end with receipt of regulatory approvals and completion of the Transaction expected in Q1 2011. The de-mergers should be completed by Q3 2011.
Will Mobilink be a Part of VimpelCom? Mobilink – a subsidiary of the Orascom Telecom Holding, is Pakistan’s leading cellular service provider. With more than 31.6 million subscribers, Mobilink maintains market leadership through cutting-edge, integrated technology, the strongest brands and the largest portfolio of value added services in the industry, a broadband carrier division providing next generation internet technology as well as the country’s largest voice and data network with over 8,000 cell sites. But, it is not officially confirmed yet, whether Mobilink will be a part of VimpelCom or not after this VimpelCom-Weather merger?