Orascom Seeking Merger with Telekom Austria - Report

Egypt based Orascom Telecom Holding is reported to be in talks which could lead to it merging with Telekom Austria. The company's largest single shareholder is the Austrian government, though its holding firm, OeIAG.

OeIAG owns 27.37 percent of Telekom Austria, with the rest floated on the stock market. The company has a stock market valuation of around EUR6.9 billion (US$9.8 billion).

OeIAG and Telekom Austria have not commented on the report, which initially broke in the Kurier newspaper. The report said Orascom would liaise with Weather Investments, which is controlled by Orascom's majority shareholder, Naguib Sawiris for financing. Weather recently sold 10% of its shares to three private equity firms for EUR1.1 billion.

Weather has mobile phone networks across the Middle East, Africa and south Asia through its controlling stake in Orascom Telecom Holding as well as operations in Italy and Greece.

Telekom Austria recently said that it is - in principle - open to taking part in a large-scale merger in coming years, if the right opportunity comes along, and if the Austrian state agrees. Confirming statements given by Telekom Austria's Chief Executive Boris Nemsic in an interview with Bloomberg News last month, spokeswoman Elisabeth Mattes said the company partakes in ongoing loose talks with other companies, but that nothing was concrete at the time.

Nemsic famously accused the regulatory regime in Europe as being worse than that in a repressive Communist state. In an interview in February, he said that "we have been much better treated in Belarus than in Brussels. That's not a political statement. That's a business statement,"

Telekom Austria has operations in Austria, Bulgaria, Croatia, Slovenia, Liechtenstein, Serbia, Macedonia, Belarus and Czech Republic

On the web: Kurier

Posted to the site on 9th September 2008