Vimpelcom Ltd will eye mergers once formed

BARCELONA, SPAIN: Vimpelcom Ltd, the new company to be formed from the Russian and Ukrainian holdings of Telenor and Alfa Group, will look for similar sized companies to merge with, its chief executive said on Thursday.

Norway's Telenor and Russia's Alfa Group have decided to merge their holdings in Russia's No. 2 mobile phone operator Vimpelcom and Ukrainian company Kyivstar as part of their bid to end one of Russia's longest corporate battles.

They have launched a share exchange offer and the merged entity, Vimpelcom Ltd, will be listed in New York.

"We will be looking for possibilities to add to our portfolio," Vimpelcom Ltd Chief Executive Alexander Izosimov told Reuters at the Mobile World Congress trade fair.

"We'll look at the companies of a similar size," he said, adding that they would be interested in firms that were number one or two in their market. "Our structure is very conducive to that."

Earlier this month Vimpelcom Ltd launched the start of the offer to exchange all shares in Vimpelcom for its own shares or a nominal cash payment, seeking a shareholder acceptance threshold of more than 95 percent.

Izosimov said the reaction from shareholders had so far been positive.

"It seems that everybody believes strategically it's a good move," he said. "The challenge will be more logistical, how to make people go and execute (the offer) because our threshold is pretty high."

If the offer completes successfully, Vimpelcom Ltd will acquire all the shares of Kyivstar, subject to the Ukrainian anti-monopoly regulator's approval.

Izosimov said the timing of an election in Ukraine had made the regulatory process slightly more difficult, but he said it should be completed before April.

"My hope is that transactions of that scale don't happen every day, on the market in telecoms and in Ukraine in particular, so the government should and will be engaged."

If approved, the deal should bring an end to a half-decade-long battle between Telenor and its powerful partner, the oil-to-telecoms Moscow-based Alfa Group.

Izosimov said the two firms had a similar strategic outlook and were cooperating well.

"Before I took this position I spent quite a lot of time talking to them and it seems like they genuinely made peace and genuinely want to push this company to the next step of development," he said