Thu, Aug. 6, 9:47 AM
- VimpelCom (NASDAQ:VIP) is up 3.8% after the company finally came to agreement to merge its Italy unit, Wind Telecomunicazioni, with Hutchison's (OTCPK:HUWHY) Three Italia, in a €21.8B deal (about $24B), creating a telecom carrier that would surpass Telecom Italia (TI -1.9%) as Italy's leader in total customers, with more than 31M.
- The talks -- in progress for well over a year -- result in a 50/50 venture where Wind's CEO Maximo Ibarra will keep his role while Three's COO Dina Ravera will oversee integration. Each firm will nominate three board members to a six-member board.
- The deal values Wind at €13.9B and Three at €7.9B. An IPO for the JV was reported to be considered earlier, though VimpelCom CEO Jean-Yves Charlier says they haven't discussed one.
- The transaction requires antitrust approval from Europe, but Italy is late to the consolidation game, as countries like Germany, Ireland and Austria had previously gone from four carriers to three.
- The companies say the deal will deliver cost savings of more than €5B, mainly from combining the mobile networks.
- VimpelCom also posted Q2 results where its Q2 revenues narrowly beat expectations despite a 26% drop.
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