In today’s scheduled Special General Meeting, 93.1% of the Company’s voting shareholders participated, out of which 53.3% of the voting shareholders approved the proposed merger.
“Following this favorable outcome, the management teams of VimpelCom and WIND TELECOM will proceed in satisfying the conditions precedent for the completion of the Transaction, which is expected to take place in the first half of 2011”, said a statement issued by the group.
If transaction, subject to regulatory approvals and recipient of funds, goes through – both Wind Telecom and VimpelCom will merge with VimpelCom owning 51.7 % of Orascom Telecom and 100 % of Wind Italy.
Naguib Sawiris, Executive Chairman of Wind Telecom, in return will get $1.495 billion in cash and 325.6 million new common shares and 305 million new convertible preferred shares.
Larger VimpelCom will have more than 173 million subscriber base with with pro forma net operating revenues of US$21.3 billion and pro forma EBITDA of US$9.4 billion for the year ended 31 December, 2009.
Alexander Izosimov, CEO and President of VimpelCom, commented:
“The approval of this transformative combination with Wind Telecom by our shareholders will lead to the creation a new global telecom player with over 173 million Mobile subscribers covering a population of 838 million people.
The combined group will have a significantly diversified revenue base, substantially larger scale of operations, and potential synergies estimated to be US$2.5 billion on a net present value basis. This transaction and the shareholder vote underscore the Company’s dedication to delivering substantial value creation for shareholders and our commitment to corporate governance excellence.”
Telenor, which earlier opposed the deal said that its will remain commitment to the future prosperity of VimpelCom.
“Even though we believe VimpelCom would have been better off without this deal, we will now continue to work in the best interest of VimpelCom and its shareholders” said Dag Melgaard, spokesperson Telenor Group.
Naguib Sawiris, Executive Chairman of Wind Telecom, said:
“Following the industry trend of consolidation, we believe there will be only space for larger global operators in the market that will be able to benefit from economies of scale and scope. We look forward to continuing to play a significant role in the global telecom industry as part of one of the biggest telco players in the world.”
Mobilink will become part merged VimpelCom. In a statement issued today, company welcomed the deal.
Commenting on the decision Rashid Khan, President and CEO, Mobilink said:
“The decision which is in favor of the merger is slated to change the global telecommunication scenario. As a key subsidiary of Orascom Telecom Holding, Mobilink welcomes this win and looks forward to becoming a part of one of the biggest telecom players in the world.”
CCP Approval in Pakistan:
Mobilink in Pakistan being part of Larger VimpelCom will be owned by Telenor Group (with minority stakes) that has its operations in Pakistan with fully owned Telenor Pakistan.
This translates into a proposition according to which Mobilink and Telenor Pakistan will be owned by same group (Telenor International) at a parent group level.
The outcome can possibly form a cartel in Pakistan which may not be favorable for competitors such as Ufone, Warid Telecom and CMPak.
For time being, Competition Commission of Pakistan has granted conditional approval for the Orascom-VimpelCom merger.
A press release issued by CCP said that it conditionally approved the deal after undertaking Phase-II review of the transaction to address the competition concerns.
VimpelCom may face a similar regulatory hurdle in Bangladesh.
Citing Chief Executive of VimpelCom, Alexander Izosimov, Reuters has reported that group will not need sell assets in Pakistan or Bangladesh, based on CCP concerns, he said: “There is no sell-off needed.”