MegaFon, MultiRegion granted FAS approval for NetByNet acquisition

1 Apr 2011

According to local press reports, Russian mobile operator MegaFon and domestic cableco MultiRegion have both been given permission by the country’s Federal Antimonopoly Service (FAS) to acquire NetByNet, the fourth largest internet service provider (ISP) in Moscow. Kommersant reports that the deal — which is worth between USD280 and USD380 million — ‘will effectively see NetByNet split in two’.

NetByNet provides broadband internet access and some 90 television channels across its cable network, and currently counts around 390,000 subscribers, of which 330,000 are situated in Moscow and the surrounding region. Its largest competitor in that region’s broadband segment is Comstar United TeleSystems (Comstar-UTS), which is believed to have a 30% market share in the city. TeleGeography notes that in October 2010 Comstar received permission from the FAS to transfer MultiRegion’s assets to its Comstar-Regions group; MultiRegion was acquired by Comstar’s parent company Mobile TeleSystems (MTS) for a fee of USD123.5 million in July 2010. MultiRegion is a group of broadband and cable TV providers with a presence in 37 cities of the Russian Federation.

According to Kommersant, NetByNet is currently owned by Fairlie Holding & Finance Limited, whose main shareholder is the enigmatic Gregory Bernstein, with a 34% stake. Other shareholders include Gazprombank (31%), Aton Capital Private Equity Group (16%) and Ivan Tavrin (16%). The remainder of the company’s shares are held by NetByNet’s management. The company was put up for sale in October 2010, with national fixed line operator Rostelecom initially expressing an interest in acquiring the ISP.

Russia, Comstar United TeleSystems (Comstar UTS), MegaFon, NetByNet (owned by MegaFon)