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Tele2 and Kazakhtelecom to Combine Mobile Operations in Kazakhstan

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Tele2 Group and Kazakhtelecom have agreed to combine their mobile businesses in Kazakhstan. This Joint Venture will combe Tele2's existing operations in Kazakhstan with Kazakhtelecom's mobile business, Altel.

The companies that that the Joint Venture will be positioned to take advantage of Tele2's successful business in Kazakhstan built over the course of six years and the continued rollout of Altel's 4G network.

The new business will have more than 5.6 million subscribers [1] and a market share of around 22%.

Allison Kirkby, President and CEO of Tele2 Group, commented: "This transaction will enable our customers to gain access to Altel's 4G network and to benefit from its accelerated rollout across Kazakhstan. As a result, both consumers and shareholders will benefit from the synergies generated by the Joint Venture."

Going forward, Tele2 and Kazakhtelecom will have, respectively, 51 and 49 percent of the voting rights and a 49 and 51 percent economic interest in the Joint Venture. Tele2 will retain management control. As part of the transaction, Tele2 will purchase Asianet's existing 49% stake in Tele2 Kazakhstan for an upfront consideration of SEK 128 million (USD 15 million) and a future earn out equivalent to an 18% economic interest of the Joint Venture. Therefore, Tele2 will have a fully diluted economic interest of 31% taking account of Asianet's earn out.

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Tags: tele2  kazakhtelecom  Kazakhstan