Wind Telecom and Vimplecom merger to go through

17 March 2011

Shareholders approve deal to create world’s fifth-largest operator

Russia-based Vimpelcom’s shareholders have approved the Wind Telecom (formerly Orascom Telecom) merger worth $6bn.

The vote was approved by 53.3 per cent of shareholder votes on 17 March.

“We have been working on the deal for a while now and we’re happy to close the issue. Both Vimpelcom and Wind Telecom will work to close the deal to create the world’s fifth-largest telecom player,” says Wind Telecoms chief executive officer Khaled Bichara.

Under the terms of the merger Vimplecom will pay $1.49bn in cash and Wind chairman Naguib Sawiris will gain 30 per cent voting rights in the new operator.

Wind’s Algerian operation Djezzy is included in the deal. “We are now talking to the Algerian government to see what they want and where we can go forward,” says Bichara.

Djezzy has been the biggest hurdle and source of difficulty in the negotiations with the Algerian government adamant on nationalising the country’s largest operator in terms of subscribers and market value. Djezzy is also Wind’s most profitable unit.

Bichara believes that a tie-up with the Russian firm will bring more money to the region to spend on research and development to provide better services and lower prices.

The new operator will have 173 million mobile subscribers. The completion of the deal is subject to regulatory approvals.

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