Vimpelcom Ltd. expects Alfa Group and Telenor to complete a merger of Russian and Ukrainian mobile-phone assets by the end of April, chief executive Alexander Izosimov said Tuesday.
Vimpelcom Ltd., the company being formed by Telenor and Alfa’s Altimo to consolidate holdings in Russian and Ukrainian mobile operators, said it began a share exchange offer Tuesday. Shareholders and holders of American depositary shares in VimpelCom have until April 15 in the United States and April 20 in Russia to accept the offer, VimpelCom said in a statement.
The government on Feb. 3 approved plans by Telenor and Altimo to combine their stakes in VimpelCom, Russia’s second-largest mobile-phone company, and Ukraine’s Kyivstar after they agreed to invest 137 billion rubles ($4.5 billion) in the new company, Federal Anti-Monopoly Service chief Igor Artemyev said that day. Ukraine’s Anti-Monopoly Commission has yet to approve the plan, Izosimov said Tuesday in a telephone interview.
Vimpelcom Ltd. will become the largest mobile-phone operator in Eastern Europe by revenue, according to the CEO. Its shares will start trading in New York within two weeks after the merger is complete, Izosimov said. The company will consider acquisitions everywhere outside of the Americas, he added.
“Growth remains an important element in the company’s strategy, but it will be a very selective approach,” Izosimov said Tuesday. “We will evaluate very carefully any risks related to merger and acquisition transactions.”
Telenor and Altimo in October agreed to merge their stakes in VimpelCom and Kyivstar, ending years of legal disputes over control of the two operators. The new joint venture will be based in the Netherlands and incorporated in Bermuda for neutrality, the companies said in October.
“When making their decision about the offer, investors should look at long-term prospects against current multiples and consider that the asset merger will create a global company and will end the conflict between Alfa Group and Telenor,” said Daniel Zatologin, an analyst at the KIT Finance investment bank, with a “buy” recommendation on VimpelCom.
“Altimo will be able to create additional value for the new company because it’s very active in the African and Southeast Asian markets,” Zatologin said.
VimpelCom may expand further in southeast Asia after starting operations in Vietnam and Cambodia, then-chief executive Boris Nemsic said June 6. Altimo is interested in the growing African market, Kommersant reported in September 2008, citing vice president Kirill Babayev.
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