VimpelCom, Megafon agree 50-50 ownership of Euroset

Nieuws Mobiel Russische Federatie 7 DEC 2012
VimpelCom, Megafon agree 50-50 ownership of Euroset
Russian operator VimpelCom announced that it has acquired 0.1 percent of the shares of mobile retail chain Euroset to increase its ownership interest to 50 percent of Euroset. The shares were issued by Euroset to VimpelCom subsidiary simultaneously with the acquisition of the other 50 percent of the shares of Euroset by Lefbord Investments Limited, a company owned by Russian rival MegaFon and Garsdale Services Investment. 

As a result of these transactions, VimpelCom and Lefbord have equal economic and governance rights in Euroset. Previously, VimpelCom had a minority interest in Euroset with more limited governance rights. VimpelCom expects to continue to account for Euroset using the equity method. 

Megafon also confirmed the closing of Lefbord's acquisition of 50 percent in Euroset for USD 1.07 billion. The deal gives an enterprise value of USD 2.3 billion (including net debt) to Euroset. Additional payment of up to USD 100 million may be made if Euroset meets certain targets in the first half of 2013. A year after closing, Megafon is expected to buy Garsdale’s 50 percent stake in Lefbord. 

Megafon said the deal with Euroset should provide it broader distribution and help reduce churn, while also providing synergies on handset sales. Euroset is the largest retailer of mobile phones in Russia. 

Categories:

Mobiel

Companies:

Euroset,  MegaFon,  Vimpelcom

Countries:

Russische Federatie

Tags:

Distribution - retail outlets, Shareholders & subsidiaries, M&A buyouts & divestments

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