Russian operator Vimpelcom has agreed to take over much of Orascom Telecom and Italian operator Wind. The agreement with Weather Investments will see Vimpelcom acquire 51.7 percent of Orascom Telecom and 100 percent of Wind Telecomunicazioni in exchange for 326 million Vimpelcom shares and USD 1.8 billion cash. The Orascom activities in Egypt and North Korea are excluded from the transaction, as is Wind Hellas in Greece. The Weather shareholders will have a 18.5 percent voting stake in Vimpelcom after the deal, while Telenor's stake will dilute to 29.3 percent and Altimo will hold 36.4 percent. The takeover will create what the companies say is the world's fifth-largest mobile carrier, with operations in 20 countries in Europe, Asia, Africa and North America and 174 million subscribers. Pro forma revenues for 2009 for the combined group were USD 21.5 billion and EBITDA was at USD 9.5 billion. Vimpelcom said it will earn around a third of revenues from Russia and Italy each, with the remainder from a range of emerging markets. The company also expects around USD 2.5 billion in synergies from operating and capital spending in the combind group. Vimpelcom said it has the financing in place for the acquisition and any required refinancing of Weather debt, with its net debt after the close of the deal estimated at USD 24 billion or 2.5 times EBITDA. Pending shareholder and regulatory approval, the acquisition is expected to close in Q1 2011.
