MegaFon Completes Acquisition of Shares in Euroset
OJSC "MegaFon" announces that on December 6, 2012 it completed a previously announced transaction to acquire an indirect 25% interest in Euroset, which owns the largest chain of mobile telecom retail outlets in Russia.
Under the transaction, Lefbord Investments Limited, owned equally by MegaFon and Garsdale Services Investment Ltd, has acquired 50% of Euroset Holding N.V., the owner of the Russian retail chain, for USD 1.07 billion, ascribing an enterprise value of USD 2.3 billion (including net debt) to Euroset. Additional payment of up to USD 100 million may be made if Euroset meets certain targets in the first half of 2013. One year after closing, MegaFon is expected to buy the Garsdale's 50% stake in Lefbord and, thereby, to take control of Lefbord's entire 50% interest in Euroset Holding N.V. The remaining 50% of Euroset Holding N.V. is owned by OJSC Vimpelcom, the third largest mobile operator in Russia.
MegaFon believes that its investment in the largest Russian mobile retailer will be instrumental in further enhancing the quality of its subscriber base and in helping to reduce churn, and will result in broader marketing of MegaFon products through Euroset's outlets. MegaFon believes in particular that it may be able to benefit from synergies related to the sale of handsets, for which Euroset is the market leader in Russia.
"For MegaFon, the acquisition of shares in Euroset is an investment in a strong and successful company. As an investor we will support the growth of Euroset's business and its further development, through effective implementation of a competitive strategy", said Ivan Tavrin, CEO of MegaFon. "Naturally, we are planning to expand our cooperation with Euroset and make its services even more available for our clients", he added.
"This deal definitely is the most important for telecommunication market. It involved hard work and energy. As a result, the market now approaches to highest standards, it changed the face and the purposes", said Alexandr Malis, President of Euroset.