Telecom news: VimpelCom and Orascom confirm merger talks

That's a really good move. (via GSMA)

The prospect of a US$25 billion mega-merger between VimpelCom Ltd and Orascom appears to have inched forward this week with both parties reportedly confirming deal talks. Moscow-based newspaper Vedomosti reports today that VimpelCom’s board met in Amsterdam last week to discuss the deal, which saw the operator’s two main shareholders – Russia’s Alfa Group and Norway’s Telenor – both support the merger “in principle.” Meanwhile, in a wide-ranging interview with Canada’s Globe and Mail newspaper this week, Orascom chairman Naguib Sawiris confirmed for the first time that talks with VimpelCom had started. “We are not only talking to them, we are talking to anybody,” Sawiris told the newspaper. However, he noted that the priority for the group was to solve its problems in Algeria (where the government has banned Orascom from selling its Algerian network to a third party); finding “a good partner for the group” was the next issue on Orascom’s agenda, he said.
According to reports last month, VimpelCom Ltd is looking to buy Orascom’s Italian mobile firm (WIND) and take a 51 percent stake in Orascom itself – funding a deal through a combination of cash and shares. This would see Orascom’s owners get around 20-23 percent of voting shares in the enlarged VimpelCom group, while Alfa Group and Telenor would see their shareholdings decrease to 27 percent and 35 percent, respectively. Analysts have warned, however, that such a deal would see VimpelCom take on a significant amount of extra debt.