Telenor makes peace with Alfa and plans $23bn merger
NORWEGIAN Telenor and Russian Alfa Group have agreed to merge their Russian and Ukrainian holdings into a $23bn (£14.4bn) New-York listed telecoms firm, ending one of Russia’s longest corporate wars.
Telenor’s stock surged 15 per cent on the news the row had ended. The dispute was seen as a major threat to foreign investment in Russia and could have meant Telenor losing its stake in Russia’s second biggest mobile operator Vimplecom in payment of a $1.7bn fine.
The deal will see Vimpelcom, worth around $18.4bn, merge with Ukraine-based, unlisted Kyivstar, which analysts said was valued at $5.2bn.
The half-decade-long battle between Telenor and its powerful partner, the oil-to-telecoms Moscow-based Alfa Group has chilled Russia’s investment climate.
Telenor had faced the potential selloff of its stake in Vimpelcom to pay a $1.7bn fine from a Siberian court over the joint venture’s expansion into Ukraine.
The case was brought by Farimex, an obscure shareholder that Telenor had suspected was acting on behalf of Alfa, but which Alfa denied.