Sawiris: Vimpelcom-Orascom merger completion ’50-50 at best’

8 Nov 2010

Reuters quotes Egyptian tycoon Naguib Sawiris as saying that there is ‘at best’ a 50% likelihood of completing the proposed USD6.6 billion merger between Russian mobile group Vimpelcom and Orascom Telecom, the Cairo-based cellular group of which he is chairman and controlling shareholder. Sawiris said Norway’s Telenor – which owns nearly 40% of Vimpelcom – was ‘not motivated’ to push through the merger, which could be hindered by an ownership dispute with the Algerian government as well as anti-monopoly and/or foreign ownership issues in Pakistan and Bangladesh (two countries in which both Telenor and Orascom have subsidiaries). Sawiris, speaking to Norwegian newspaper Dagens Naerinsliv, said: ‘Now, I doubt anything will come from the merger. Telenor is not motivated, as I see it. It’s 50-50 at best that anything will come of it.’ An Orascom spokeswoman confirmed the comments to Reuters yesterday (7 November 2010), whilst Telenor refused to add further comment until the merger issue returned to Vimpelcom’s board.

The Algerian government is demanding hundreds of millions of dollars in back-taxes from Orascom’s local unit Djezzy – the group’s largest single revenue earner – and wants to nationalise the operator, at a price expected to be low enough to derail Sawiris’ USD6.6 billion agreement to sell his holding company Weather Investments’ majority stakes in Orascom – excluding two of its eleven mobile operations worldwide – and Italian telco Wind to Vimpelcom.