Wireless carriers Wind Telecomunicazioni and 3 Italia have chosen the senior execs who would lead their combined business, Bloomberg reports.
People familiar with the matter told the newswire that Maximo Ibarra, the current CEO of Vimpelcom-owned Wind…
Wireless carriers Wind Telecomunicazioni and 3 Italia have chosen the senior execs who would lead their combined business, Bloomberg reports.
People familiar with the matter told the newswire that Maximo Ibarra, the current CEO of Vimpelcom-owned Wind would be appointed as CEO of the merged entity, while Vincenzo Novari, the CEO of Hutchison Whampoa-controlled 3 will become a board member.
According to one of people, the parties are negotiating the shareholding structure of the enlarged business and hope to strike a deal within the next three months.
Hutchison and Vimpelcom declined to comment.
Rumours about a potential deal first emerged years ago, with negotiations stalling over ownership issues and valuation.
In March, an FT report suggested that the operators were in advanced–stage discussions to combine their businesses, with Hutchison looking to acquire a 51% stake in the merged entity.
However, a person familiar with the companies doubted the media reports, suggesting that the management teams of both Vimpelcom and Hutchison are focused elsewhere. Wind has been “clearly focused on its refi and tower disposal, with Vimpelcom managing these situations and also the resolution at Algerian business Djezzy”. Hutchison, in the meantime is “one hundred per cent focused on the agreed purchase of O2 in the UK”, which is under regulatory review.
“Plus, does Hutch want to have two files open with the European competition authorities? It might be better to wait for clearance in the UK.”
Last October, Wind owner Vimpelcom, which is partly-owned by Russian billionaire Mikhail Fridman, said that it had failed to reach an agreement regarding a potential 50:50 joint venture in Italy, adding that it might not be able to identify a deal “on terms acceptable to the company”.
The deal would ease pressure on highly-leveraged, number three operator Wind, which has struggled to reduce its €10bn debt burden.
Earlier this year, the carrier sealed a €1.8bn loan refinancing deal led by Banca IMI, BNP Paribas, Credit Agricole, Deutsche Bank and HSBC.
It also agreed to sell 7,377 telecom towers to Spanish infrastructure group Abertis for €693m (US$774.29m).
Hutchison’s move follows four-to-three mergers in Austria and Ireland, as well as a £10.25bn (US$15.3bn) agreement to buy Telefonica’s O2 UK. It also has operations in Denmark and Sweden.
A combined Wind/3 Italia would hold roughly a third of the market, placing it on a par with incumbent Telecom Italia (TI) and Vodafone.
According to Rick Mattila, an analyst at Mitsubishi UFG, “the prospect of consolidation is a positive for Telecom Italia,” which has also been under pressure to reduce its debt levels and upgrade its outdated network infrastructure.
