Tele2 wises up and drops bid for troubled SMARTS

29 Jul 2011

According to RBC Daily, Tele2 Russia has abandoned plans to acquire regional mobile operator SMARTS Group. As previously reported by TeleGeography’s CommsUpdate, in May this year Tele2 tabled an offer of USD390 million (including USD100 million worth of debt) for 97% of the Russian cellco. However, it is now believed that Tele2 considers the deal too risky due to the ongoing conflict among SMARTS shareholders. It is not the first time that an approach for SMARTS has fallen apart; back in early 2009 state-owned telecoms holding company Svyazinvest emerged as the frontrunner in a previous SMARTS sale attempt, only to pull out of the deal citing other priorities.

Regional operator SMARTS, which is headquartered in Samara, provides cellular services in 16 regions, covering approximately 34 million people. Selected key markets for the cellco include: the Samara, Ivanovo, Astrakhan, Penza, Ulyanovsk, Volgograd and Saratov Regions, as well as the Republics of Bashkortostan, Kalmykia, Tatarstan, Mordovia, Mari El and Chuvashia; TeleGeography notes that Tele2 is not currently active in any of the regions where SMARTS has a presence, suggesting that it would be a useful strategic purchase, and as such, a logical acquisition to help Tele2 spearhead growth.

Russia, SMARTS Group, Tele2 Russia