View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
  2. Data Centre
August 4, 2009

Russia’s MTS to acquire controlling stake in COMSTAR-UTS

Transaction expected to provide MTS access to important growth markets in broadband

By CBR Staff Writer

Mobile TeleSystems, the mobile phone operator in Russia and the CIS, has revealed that the boards of directors of MTS and Sistema JSFC, the public diversified financial corporation in Russia and the CIS, have approved the acquisition by an MTS subsidiary of a 50.91% stake in COMSTAR – United TeleSystems (COMSTAR-UTS), a supplier of integrated telecommunication products in Russia and the CIS, from Sistema.

Under the proposed terms, a subsidiary of MTS will purchase Sistema’s 50.91% stake in COMSTAR-UTS for $1.272 billion or $5.98 per Global Depositary Receipt (GDR). The acquisition is said to be dependant on the buyer’s ability to raise the necessary financing for the transaction and the approval of Sistema shareholders.

MTS believes that the transaction will provide access to important growth markets in commercial and residential broadband; realise synergies in capital and operational expenditures; and allow for the development of effective content platforms and services.

Mikhail Shamolin, the president and CEO of MTS, said: “There is no doubt that MTS’ markets are changing, and we believe the Comstar acquisition will translate into the right asset and product mix to realise significant growth in the Russian and CIS telecommunications markets.

“Pairing MTS’ brand and footprint with Comstar’s product mix and know-how will enable us to deliver wider internet access, integrated communications services and innovative solutions to our customers. We are confident that this deal will allow both companies to meet the challenges our markets present and seize opportunities to create additional value for our respective shareholders.”

Approval from the Federal Anti-Monopoly Service (FAS) to acquire up to 100% of COMSTAR-UTS was received on June 18, 2009, though additional approvals will be required to complete the transaction. Provided these conditions are met, the execution of the share purchase agreement and closing of the transaction is scheduled for the end of October 2009.

No decision has been made regarding the extension of an offer to minority shareholders of COMSTAR-UTS. The approval of the acquisition of COMSTAR-UTS by the MTS Board of Directors was based on the recommendation of the Special Committee to the Board, which consists of the three independent directors who serve on the Board.

Content from our partners
Scan and deliver
GenAI cybersecurity: "A super-human analyst, with a brain the size of a planet."
Cloud, AI, and cyber security – highlights from DTX Manchester

As transactions between two Russian entities must be carried out in rubles, MTS will reportedly hedge the final amount due on completion of the transaction with 50% of the sale price pegged at 31.9349 rubles:dollar rate, while the balance will be calculated at the official rate of the Central Bank of Russia on the date of completion.

Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.