Russia’s MegaFon has completed a US$1bn-plus deal designed to give it a 50% stake in the nation’s largest handset retailer, Euroset, in a year’s time.
The transaction sees Lefbord Investments, jointly owned by MegaFon and Garsdale Services…
Russia’s MegaFon has completed a US$1bn-plus deal designed to give it a 50% stake in the nation’s largest handset retailer, Euroset, in a year’s time.
The transaction sees Lefbord Investments, jointly owned by MegaFon and Garsdale Services Investment, acquire a 50% stake in Euroset, valuing the enterprise at US$2.3bn including net debt, MegaFon announced today. MegaFon, Russia’s second largest mobile operator, has agreed to pay US$1.07bn and may pay up to US$100m extra if Euroset meets certain targets in the first half of 2013.
A year after closing, MegaFon is expected to buy Garsdale’s stake in Lefbord, giving it a 50% share in Euroset. Garsdale is a holding company controlled by MegaFon’s largest shareholder, Alisher Usmanov.
Russia’s third largest mobile operator VimpelCom owns the other 50% of Euroset.
In its own separate statement, VimpelCom said its stake in Euroset had risen 0.1% to 50% as a result of the MegaFon deal, meaning VimpelCom and Lefbord now have equal financial and governance rights in the retailer.
MegaFon said it believes its investment in Euroset will help it to improve its subscriber base, reduce churn and boost sales.
“As an investor, we will support the growth of Euroset’s business and its further development through effective implementation of a competitive strategy,” said CEO Ivan Tavrin.
VimpelCom CEO Anton Kudryashov said the deal represents the next step in building a “more efficient and sustainable operational model” between itself and “strategic partner” Euroset.
