MTS buys Sistema Telecom from Sistema; MTS, Comstar shareholders approve merger

29 Dec 2010

In an intra-group reorganisation, Russian mobile operator Mobile TeleSystems (MTS) has completed the 100% purchase of sister company Sistema Telecom from their parent, Russian conglomerate Sistema, for RUB11.59 billion. MTS also assumed debts of RUB 1.8 billion, including RUB1.35 billion owed to subsidiaries of MTS. Sistema Telecom holds the rights to the egg-shaped logo used by MTS and its CIS regional subsidiaries. Sistema had approved the deal last Friday (24 December 2010) despite Russia’s Investor Protection Association warning that the deal valued Sistema Telecom disproportionately highly in relation to the financial benefits that MTS would receive.

Within the same group, also on Friday shareholders of both MTS and fixed network operator Comstar United TeleSystems approved the merger of the two companies, reports Dow Jones Newswires, with the restructuring deal due to be completed in the second quarter of 2011. MTS currently holds 73% of Comstar.

Russia, Comstar United TeleSystems (Comstar UTS), Mobile TeleSystems (MTS), Sistema