Megafon, a major Russian mobile operator controlled by Russian billionaire Alisher Usmanov, has acquired a 50% stake in Euroset, Russia’s first mobile phone retailer, from Alexander Mamut, a prominent Russian businessman. Vimpelcom, another leading mobile operator, has increased its stake in Euroset from 49.9% to 50%.
The deal has valued the company at $2.3 billion, taking into account a $160 million debt, the Russian news agency RIA Novosti reported.
The two companies will manage Euroset jointly, “in a consensual way,” as Vimpelcom’s press secretary Anna Aybasheva expressed it in an exchange with RIA. Euroset’s current CEO Alexander Malis will remain in his position.
MTS, a competitor of Megafon and Vimpelcom, has commercial agreements in place with Euroset . The mobile operator hopes to renew this partnership next year, in compliance with the conditions imposed by the antimonopoly authorities, which approved the transaction this past September.
According to the news agency RIA Novosti, as of September 2012, Euroset controlled more than 5,500 retail outlets in Russia and Belorussia. Megafon itself owned 1,750 outlets in addition to another 2,000 retail locations Megafon operates in partnership with third parties, while its competitors Vimpelcom and MTS also have their own retail networks.
Euroset prepared an IPO last year, but the attempt failed due to its lack of appeal for investors and unfavorable market conditions.
In a separate move, Megafon may look into acquiring Tele2 Russia, Megafon executive Ivan Streshinskiy said in an interview with Bloomberg last week. The Swedish telecom group Tele2 is said to have considered selling its Russian subsidiary or forming an alliance with a local player since it failed to win an LTE license in tenders which took place this past summer.
Megafon raised $1,7 billion during its IPO on the London and Moscow stock exchanges last month. In July, Megafon and Scartel, the WiMAX provider switching to LTE, formed a holding to assert their leadership on the 4G market.
