Sistema enters into asset swap talks with France Telecom

16 Sep 2011

According to RBC Daily, Russian financial/industrial holding company AFK Sistema is in the midst of ‘substantive’ negotiations with France Telecom (FT) with a view to exchanging a controlling stake in Russian cellco Mobile TeleSystems (MTS) for an minor interest in the Paris-based telecoms group – which is said to be the eighth largest telco in the world in terms of global revenues. Although the precise details of the projected deal remain unclear, it is believed that the negotiations began when Sistema approached FT with a view to buying the international telco outright. RBC Daily goes on to cite a source close to the deal who claims that FT submitted a counter-offer for MTS, although this rumour was promptly denied by Sistema chief Vladimir Yevtushenko. Despite the detailed negotiations, RBC Daily’s source admitted that Sistema is currently ‘talking to various players of the European market’.

According to TeleGeography’s GlobalComms Database, MTS is majority-owned by AFK Sistema (52.8%). 0.5% is in the hands of other shareholders, while 46.7% of the company is in free float. Meanwhile, as at 31 December 2010 FT was 26.97% owned by the French government either directly or indirectly in conjunction with Fonds Strategique d’Investissement, while 73.03% was in free float.

France, Russia, Mobile TeleSystems (MTS), Orange Group, Sistema