Russian telecom giant Vimpelcom and Egypt’s Weather Investments have agreed to merge their assets, it has been announced.
The deal, worth $6.6 billion (£4.2 billion), will create the world’s fifth-largest mobile phone company, with combined subscriptions of more than 174 million. It will also give Vimpelcom, which has operations in many former Soviet republics, access to new markets in Africa and the Middle East.
The new company will operate in 20 countries in Europe, Asia and Africa.
Vimpelcom will own Weather Investments’s 51.7 per cent stake in Egypt’s Orascom Telecom Holding and all of Italian mobile operator Wind Telecomunicazioni. Weather Investments shareholders will get an 18.5 per cent voting stake in Vimpelcom and $1.8 billion in cash.
Vimpelcom owns Russia's second-largest mobile phone operator, as well as service providers in Ukraine, Kazakhstan, Uzbekistan, Tajikistan, Georgia, Armenia, Kyrgyzstan, Vietnam and Cambodia.
Weather Investments is headed by the Egyptian telecom tycoon Naguib Sawiris.
Orascom Telecom will set up a company to manage its assets in Egypt and North Korea, which were not included in the merger. The new company will be established within the next few weeks.
Wind's Greek operation is also excluded from the agreement. It is as yet unclear whether Vimpelcom will become an owner of Orascom Telecom's Algerian unit, Djezzy.
Vimpelcom plans to raise up to $2.5 billion to finance the deal, which is subject to shareholder approval.
