VimpelCom completes acquisition of Wind Telecom
18 April 2011 |
Russian operator VimpelCom has completed its acquisition of Wind Telecom for $6.6 billion thereby creating the world’s sixth largest mobile telco by subscriber.
VimpelCom, through its transaction with Wind Telecom, now owns 51.7% of Orascom Telecom and 100% of Wind Italy. The combined subscriber base reached 181 million by the end of December 2010.
Alexander Izosimov, CEO of VimpelCom said: “VimpelCom has already commenced integration initiatives and we are focused on realising synergies, particularly in the area of procurement, and capitalising on the company’s strengthened leadership, scale and market expertise.”
In March 2011 the shareholders of VimpelCom approved for VimpelCom common shares and convertible preferred shares to be issued to create a global diversified platform. Wind Telecom’s previous shareholders received over 325 million newly-issued VimpelCom common shares as well as 305 million newly-issued VimpelCom convertible preferred shares. They also received $1,495 million in cash and will receive certain assets that are to be demerged from the Wind Telecom group and transferred back to Weather Investments.
Egyptian businessman Naguib Sawiris, chairman of Wind Telecom said: “I am confident that our minority shareholders in Orascom Telecom will benefit from the synergies created from the combination of the two entities and by the overall strengthening of the Orascom Telecom balance sheet.”
Vimpelcom has already taken steps to enter new regions with recent ventures into Vietnam and Cambodia but this new deal means entering more new markets.
Mark Gibson research analyst from Telegeography suggests that Wind's markets are very different to what Vimpelcom are used to: "The deal has some echoes of Zain's expansion and subsequent struggles after it realised it bit off more than it could chew."
11h | James Pearce
11h | James Pearce
11h | Alan Burkitt-Gray
12h | Alan Burkitt-Gray