The Anti-Monopoly Committee of Ukraine (AMCU) has decided to uphold a decision to allow the country’s largest mobile operator Kyivstar to merge with Russia’s Vimpelcom, owner of cellco Ukrainian Radio Systems (Beeline Ukraine) and integrated operator Golden Telecom Ukraine (also branded as Beeline), following a six-month secondary investigation. On 5 October 2009, Norwegian telecoms group Telenor and Altimo – the telecoms arm of Russian conglomerate Alfa Group – agreed to combine their ownership in Vimpelcom and Kyivstar under a newly created company, Vimpelcom Ltd. On 9 February 2010 Vimpelcom Ltd launched a share exchange offer which was completed on 21 April 2010 after gaining 97% acceptance from Vimpelcom shareholders. However, on 22 April the AMCU suspended its unconditional approval of the transaction. Now, as reported by Interfax-Ukraine, the AMCU’s acting head Yuriy Kravchenko announced that the Committee has concluded that there are no reasons ‘at present’ for reversing the earlier decision to allow the merger. Furthermore, he did not indicate that any additional conditions would be immediately enforced on Kyivstar/Beeline, despite expectations that the Vimpelcom-owned operators would be required to relinquish certain portions of their mobile frequency spectrum. Kravchenko said the approval was based on the market positions of Kyivstar and Beeline, in terms of revenues and number of subscribers ‘in 2009’, as well as ‘options for converting domestic radio frequencies’, whilst the opinions of the telecoms regulator, the NCCR, were also taken into account. The Committee’s statement continued: ‘It was determined that the structure of the cellular market in 2009, in comparison with previous periods, did not undergo substantial changes. The unification of radio frequency shares for the use by a single operator formed in a merger was primarily the necessity of combining both operators’ networks in a single technological cycle in order to provide quality services to subscribers.’
The AMCU also said that it had issued a fine of UAH100,000 (USD13,000) to Altimo for its lateness in providing information on its stake in Turkey’s Turkcell, which owns a 55% stake in another Ukrainian cellular operator, Astelit. Astelit filed the original complaint which prompted the AMCU to suspend its approval of the Vimpelcom-Kyivstar merger and launch the secondary investigation.
Jo Lunder, the chairman of Vimpelcom, issued a statement on the group’s growth strategy going forward: ‘This marks the completion of the transaction that created Vimpelcom Ltd, headquartered in Amsterdam. Part of the strategy behind that transaction was to build a platform for diversified growth. The recent signing of the agreement by [the new] Vimpelcom to combine with Weather [Investments, controller of Orascom Telecom] … marked a key milestone in the further development of Vimpelcom. Indeed we have certain conditions precedent to closing, however we remain committed to the transaction and believe it creates a strong potential for growth and value creation.’ Vimpelcom has operations in Russia, Ukraine, Kazakhstan, Uzbekistan, Tajikistan, Georgia, Armenia, Kyrgyzstan, Vietnam and Cambodia, and is listed on the New York Stock Exchange under the symbol ‘VIP’.