Vimpelcom close to URS deal

10 Nov 2005

The long-running saga of Vimpelcom’s proposed expansion in the Ukraine appears to be coming to an end, with the Russian cellco reportedly close to sealing a deal for Ukrainian RadioSystems (URS), despite strong opposition from shareholder Telenor. ‘The deal whereby Vimpelcom is buying Ukrainian RadioSystems is in the final stage,’ a spokeswoman for Vimpelcom told Reuters. She added that the contract would be announced soon but declined to elaborate.

Telenor and fellow Vimpelcom shareholder Alfa Group have been at loggerheads ever since the latter tried to push through a USD200 million purchase of URS last year, claiming that the cellco possesses plenty of growth potential in a rapidly expanding market. But Telenor is fiercely opposed to the purchase and the pair have been embroiled in a vicious battle for control of Vimpelcom since the early part of this year. Telenor and Alfa already share ownership of one of the Ukraine’s biggest mobile operators, Kievstar, and the Norwegian company says a potentially costly raid for the far smaller URS has ‘no business merit’; the cellco, which trades under the brand name WellCOM, has a market share of less than 0.5%.