Sistema, DT still far from completing deal for MTS stake

11 Aug 2005

Russia’s AFK Sistema and Deutsche Telekom (DT) are yet to agree a deal over the former’s purchase of the German telco’s 10% stake in Russian mobile operator Mobile TeleSystems (MTS). DT has confirmed its holding in the wireless operator is deemed a non-strategic asset, and can sell the holding once a ‘lock-up’ period expires on 15 August. The German telco offloaded a 15% interest in MTS last year, but was forced to retain the remaining 10% until now.

Sistema currently owns 50.4% of MTS with a further 37.5% in free float. A spokesman for the group said that talks with DT are ongoing, but added that it would not pay over the odds. The 10% holding is worth around USD1.5 billion at market prices, but Sistema is not likely to rush into an overly expensive purchase for a company it already controls.

Russia, Deutsche Telekom (DT), Mobile TeleSystems (MTS)