Merger in Russian Networks

The Russian investment bank, Alfa Group says that it has taken over a company that owns a 25% stake in the national GSM operator, MegaFon. The Alfa Group currently also controls the rival network, Vimplecom through sharing over 50% of the company holdings with Norway's Telenor. This could presumably presage a merger between the two companies to create a rival to Russia's largest network operator (by subscriber numbers), MTS.

MegaFon's largest shareholders will now be TeliaSonera with 25%, and Alfa Group also with 25%. The remaining is held by a range of Russian investors.

The purchase of LV Finance, which holds the 25% stake in MegaFon will be subject to approval from Vimpelcom.

There have also been reports recently that MegaFon is considering a floatation of 25% of its stock on the New York Stock Exchange, raising an estimated US$200 million. Coincidentally, Vimplecom is also quoted on the same stock exchange. MegaFon also recently secured a US$300 million credit line from the state owned bank, Sberbank, valid until 2010."

Posted to the site on 6th August 2003