MegaFon, Russia’s second-largest wireless operator, has completed the purchase of smaller player Scartel (Yota) for US$1.18bn plus debt of US$566m.
Completion follows approvals from MegaFon shareholders, its board of directors and the Russian…
MegaFon, Russia’s second-largest wireless operator, has completed the purchase of smaller player Scartel (Yota) for US$1.18bn plus debt of US$566m.
Completion follows approvals from MegaFon shareholders, its board of directors and the Russian antitrust regulator.
The operator contends that the deal will make it the nation’s largest 4G operator and allow it to better compete with rivals MTS and VimpelCom.
MegaFon, listed in both Moscow and London, bought 100% of Scartel from holding company Garsdale. The latter, which is 82%-held by oligarch Alisher Usmanov, also owns 50% of MegaFon.
The US$1.18bn cash consideration will be paid in two stages: US$590m plus 6% annual interest on the first anniversary of closing and the remainder plus interest on the second.
The US$566m debt consists of US$477m in loans from Garsdale.
MegaFon previously said the combination of the two companies’ assets will boost its position as a provider of high-speed data services. Meanwhile, Scartel customers will have access to MegaFon’s mobile internet and 2G/3G voice network.